It looks like ltib/bin/Ltibutils.pm is not calculating the rootfs size correctly!
I changed this line:
genext2fs -U -b $blocks -i $inodes -D $dev_tab -d $stage $tdir/rootfs.ext2
To
genext2fs -U -b $fs_size_p10 -i $inodes -D $dev_tab -d $stage $tdir/rootfs.ext2
It's not the best fix but this works for now.