Comment 4 for bug 122402

Mounting /cdrom yourself from a loop-mounted .iso certainly isn't supported; you will find that many partitioning scenarios unavoidably fail later if you do that, since the kernel will have the partition table locked and will refuse to re-read it without a reboot. If you need to loop-mount an .iso, you'll need to use the documented method to install from USB.

Duncan, did you try to do this?