USB Circuit Failure After Potting
After a good deal of testing I believe the problem is actually a combination of three things:


Temperature
Sensitive USB flash drives
Air pockets


On the initial batch the temperature was definitely a little too high which may have contributed or exacerbated the issue.

I've used several different models of USB flash drives and one in particular seems extremely sensitive to temperature and shock.

However, it seems the root cause of the issue is large air pockets. If any significant portion of the circuit board is not covered by epoxy it seems to fail very easily. For example, one unit failed after just falling 1 meter to the floor and was confirmed to have a large air pocket at the top of the flash drive. Another unit test with no epoxy at all similarly failed after a low speed drop test.

I've changed my potting procedure to try and eliminate air pockets and ensure the entire flash drive is covered. This is a little tricky as the design is completely enclosed and there is no (easy) way of confirming how much or little air is left inside. But recent tests seem to confirm that careful assembly to minimize air pockets leads to a more reliable product with no premature failures.