# debootstrap --arch i386 squeeze /mnt http://ftp.halifax.rwth-aachen.de/debian

# chroot /mnt
# apt-get install linux-image-686
# apt-get install grub2

(answer to Continue without installing GRUB? with Yes)

# passwd root

(put any password you want. If you miss this step, you are not logging into your new system ;)

# exit

# mount -o bind /dev/ /mnt/pendrive/dev/
# mount -o bind /proc/ /mnt/pendrive/proc/
# mount -o bind /sys/ /mnt/pendrive/sys/

# chroot /mnt
# grub-install /dev/sdc

Installation finished. No error reported.

or not from chroot: grub-install --force --removable --boot-directory=/mnt/boot /dev/sdc