Comment 6 for bug 745171

squashfs I/O errors almost always come down to hardware trouble of some kind, I'm afraid; that's the kernel telling you that it tried to read data from the physical CD and failed. There's usually no way that higher layers of software can do anything at all about this; as comment 4 indicates, much of the software we're trying to read from the CD that might be able to do error handling is itself being read improperly.

It may help to clean the CD/DVD, to burn the CD/DVD at a lower speed, or to clean the CD/DVD drive lens (cleaning kits are often available from electronics suppliers).