There I see the issue. You tried to mount a FAT32 partition as overlay. This is not supported by OpenWrt. Format the overlay as ext3, set option fstype 'vfat' to *ext3* and disable the fsck with  "option enabled_fsck  0" as explained in the OpenWrt Wiki.

Additional to this you enabled swap for the *same* partition. This had to go wrong! Disable the swap or create a second partition for swap.

Kind regards,
Johannes Morgenroth

Am 30.01.2014 18:11, schrieb Theodoros Bourchas:
root@OpenWrt:~# fdisk -l /dev/sda

Disk /dev/sda: 8031 MB, 8031043584 bytes
224 heads, 16 sectors/track, 4376 cylinders, total 15685632 sectors
Units = sectors of 1 * 512 = 512 bytes
Sector size (logical/physical): 512 bytes / 512 bytes
I/O size (minimum/optimal): 512 bytes / 512 bytes
Disk identifier: 0x00000000

   Device Boot      Start         End      Blocks   Id  System
/dev/sda1            2048    15677439     7837696    b  W95 FAT32

********************************************************************************************************
root@OpenWrt:~# cat /etc/config/fstab

config global 'automount'
        option from_fstab '1'
        option anon_mount '1'

config global 'autoswap'
        option from_fstab '1'
        option anon_swap '0'

config mount
        option target '/overlay'
        option options 'rw,sync'
        option enabled '1'
        option fstype 'vfat'
        option device '/dev/sda1'

config swap
        option enabled '1'
        option device '/dev/sda1'