Why is FAT16 limited to read-only with TrueCrypt on Snow Leopard?

I have used TrueCrypt 7.1a on Mas OS X 10.6.8 with OSXFUSE 2.3.8 with no problems. MacFuse is dead. TrueCrypt's official Mac installer 7.1a installs OSXFUSE as did 7.1. Not sure how you installed TrueCrypt but if not with the Mac installer, then uninstall what you have (including MacFuse) and install using the installer.

Also make sure you have read/write/ownership of the TC container file on the disk.

The OSXFuse website FAQ (https://github.com/osxfuse/osxfuse/wiki/FAQ) says this about MacFuse: "The latest release does not fully support Mac OS X 10.6 and will not work at all on OS X 10.7 and later versions".

I had similar problem few days ago, not related to TrueCrypt though. I've also tried few different version of MacFuse and finally end up replacing MacFuse with OSXFUSE that works well so far. And by the way, I discovered that MacFuse is no longer maintained and considered dead.