Are you sure, it's a memory problem? The serial terminal (I just flashed a factory.bin created with imagebuilder (it´s size is obviously 7,8 MB [7,75] and the sysupgrade.bin is around 5,2MB, root-squashfs 4,2MB) said:
[ 9.180833] jffs2: Old JFFS2 bitmask found at 0x0038ed1c
[ 9.186170] jffs2: You cannot use older JFFS2 filesystems with newer kernels
[ 9.195505] jffs2: jffs2_scan_eraseblock(): Magic bitmask 0x1985 not found at 0x00390000: 0x177b instead
The difference between this build and the previous one was a config.system entry added by an individual init script (uci set system.system.zram_size_mb=24) in includes files...
Before that I flashed five firmwares of this kind - w/o problem.
And now I flashed the very same factory.bin through ethernet-tftp (via serial command line) ... and it boots well. md5sum were the same.
I am not going to join the "too small, too slow" discussion again - just a proposal:
Can we make sure, that LuCI based flash procedures have optimum /memory?) conditions, so they won't fail that often? I didn't try sysupgrade from the command line this time, but I had a very similar issue with an O/CC 15.05.1-rc on a couple of wr1043nds... I didn't yet see that on the v2, but that's not a negative conclusion leading to a low memory problem... what's that "old jffs2 bitmask" message about?