Since the same problem existed after clean install of both chroot and pihole, ive checked all the output from installing. Seems there is an error at the end of the installation!
Everything goes smooth untill here:
::: Installing pihole custom index page... done!
:::
::: Installing latest Cron script... done!
::: Configuring iptables for httpd and dnsmasq..
modprobe: ERROR: ../libkmod/libkmod.c:557 kmod_search_moddep() could not open moddep file '/lib/modules/3.2.40/modules.dep.bin'
iptables v1.4.21: can't initialize iptables table `filter': Table does not exist (do you need to insmod?)
Perhaps iptables or your kernel needs to be upgraded.
grep: /etc/pihole/setupVars.conf: No such file or directory