Follow-up Comment #1, bug #11723 (project grub):
I have this same problem on a machine with an AwardBIOS (6.00PG).
It seems that ISOLINUX can boot without any problems from my USB-CDROM
drive.
After looking at the ISOLINUX sources, it seems it contains some *specific*
workarounds/fixes for certain (award) bios'es that do not correctly provide
information on the (CD) boot drive.
Since both projects use the GPL license, it might be possible to port this
code from ISOLINUX to GRUB.
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