We weren't expanding ext2 directories and as a result we could
hit a limit when the directory grows larger than one block.

Note that this fix only applies for creating subdirectories.
For creating files (ie. ext2fs_link) we were already doing the
right thing.

This option doesn't work yet.  The commit is just for adding the
capability to pass the extra kernel/initrd/appliance parameters
through 'main.c' and 'appliance.c'.