Trying to figure out why Skynet won't install with the help of 
@Adamm while Diversion install just fine, I saw a kind of a hint from Diversion installation process...
Let me explain and start from scratch.
First I show that I just formatted again USB key to ext2.
	
	
	
		Code:
	
	
		fdisk -l
Disk /dev/sdc: 4009 MB, 4009754624 bytes
251 heads, 20 sectors/track, 1560 cylinders
Units = cylinders of 5020 * 512 = 2570240 bytes
   Device Boot      Start         End      Blocks  Id System
/dev/sdc1               1        1559     3910656  83 Linux
	 
 
	
	
	
		Code:
	
	
		 df
Filesystem           1K-blocks      Used Available Use% Mounted on
/dev/root                33408     33408         0 100% /
devtmpfs                127732         0    127732   0% /dev
tmpfs                   127836       948    126888   1% /tmp
/dev/mtdblock4           64256      1888     62368   3% /jffs
/dev/mtdblock4           64256      1888     62368   3% /www/Advanced_MultiSubnet_Content.asp
/dev/mtdblock4           64256      1888     62368   3% /www/require/modules/menuTree.js
/dev/mtdblock4           64256      1888     62368   3% /www/start_apply.htm
/dev/sdc1              3787123         5   3591586   0% /tmp/mnt/sdc1
	 
 
I take it everything else other than sdc1 is from internal memory? Can't really tell if everything is fine here or not.
So with this fresh new USB key I launch Diversion installation and then I see this:
	
	
	
		Code:
	
	
		 preparing temporary whitelist
 preserving assembled hardcoded whitelist
 updated /jffs/shared-Diversion-whitelist
 refreshing Skynet to whitelist domains in shared-Diversion-whitelist
 Skynet lockfile detected
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Waiting for Skynet to finish task...
 Unable to refresh Skynet to whitelist domains in shared-Diversion-whitelist.
 Restart Skynet manually to immediately include the new whitelisted domains.
	 
 
Why is that if Skynet is not installed? Does it have anything to do with JFFS? I'm a noob here just trying to figure out... Should I format JFFS partition at next boot?
Thanks to Diversion for this hint!