Apple Users

When you iTunes>Advanced>Create MP3 version, iTunes by default creates the new MP3 file in the same folder as the original m4a (Mpeg 4) so your description of both files in the folder on your computer makes sense.

On your computer, using Finder, I would make a new folder or subfolder and separate the mp3's from the m4a's to make sure you are not inadvertently mixing them when adding to your flash drive.

Next try would be to open the flash drive in Disk Utility on your Mac. Test/Repair/First Aid it to make sure it is OK. You may be able to wipe it/zero it out to make sure that it is clean before adding only the mp3's.

If above doesn't work, borrow or buy a different flash drive. They are inexpensive. A bad flash drive is actually my first suspicion from your description; sounds like you are doing things correctly. I don't think your conversion process is the problem.

Let us know how it goes. Good luck.