TrueCrypt fails with fusefs kext error
It turned out that this was related to running a true 64-bit kernel instead of a 32/64-bit one.

Installing one of the following updates for the FuseFS system fixed the error:


Fuse for OSX: http://osxfuse.github.com/
MacFuse 2.2.2: http://mac.majorgeeks.com/files/details/macfuse.html


After installing this, I reopened TrueCrypt and was then able to mount the volume.