Virtualbox Image Raw Drive

Plug USB drive in, assuming it is /dev/sdd

sudo VBoxManage internalcommands createrawvmdk -filename myos.vmdk -rawdisk /dev/sdd chown user:user myos.vmdk

Add myos.vmdk as a disk image

Attach ISO of OS, install as normal in VM.

Expand Disk
20480 in Mb = 20Gb

sudo VBoxManage modifyhd --resize 20480 blah.vdi

boot from live CD and resize filesystem