Well, after updating to 70r15, then I checked updates again... and am now running cfg-usb 70r36. Trying another game, and yea, doesn't give me the choice to rip anywhere but to the SD card.
Here are the beta versions. Just find the one that allows ripping to USB or just use the latest beta which should allow it as well.
http://code.google.com/p/cfg-loader-mod/issues/detail?id=48