I've done a little bit of searching and it seems to have something to do with the new hybrid iso image type being used that OSX doesn't seem to understand?? I haven't found anything that could convert the iso to something it can understand yet. If anyone finds the answer I'd love to know how to successfully do this in OSX.
I think I found out how to get around this. So in the instructions in the link above there is needs to be a change. Instead of converting the image using hdiutil, simply drop the iso in the Disk Utility app on the left side and try and mount it. It will fail but it will give you the location of that partition. From there, you can use the dd command to dump this partition into a new iso image where 'diskNsN' is the partition.
dd if=/dev/diskNsN of=./ubuntu.iso bs=1m
I was able to mount this image as well as take it and dump it on my USB thumb drive as the instructions originally instructed. I just popped my thumb disk back in and my OSX 10.7.3 sees it just fine. I haven't tried booting it but it looks ok. So it looks like the new hybrid iso images being distributed have the image inside the image which I don't quite understand but by pulling it out mac seems fine with it.