If the USB drive is formatted to FAT32, then that explains it. FAT32 has a 4GB file size limit. You will have to format to NTFS to overcome that limit. However, for removable drives, NTFS is more of a hassle to use. You can research Google for the many reasons why this is, and while I could state a few reasons myself, it's really up to the user to make up his/her own mind. Please read up from THIS
search page. There are a ton of hits on the subject.
Note that the 4GB limit only applies to an "individual" file that actually exceeds 4gb... such as your ISO file. If you had a folder that contained many files and in total exceeded 4GBs, you could still transfer it... providing no individual file exceeds 4GB. However, for something like ISO's, or Disk Images... you're stuck if you're in FAT32.