Thanks for reporting and attaching logs. The OSError can sometimes be caused by hardware problems or a squashfs bug we had before 6.10 final. Could you test this with Ubuntu 6.10 or the development ersion (Feisty)? Thanks.
** Changed in: ubiquity (Ubuntu)
Status: Unconfirmed => Needs Info
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Cannot install Ubuntu
https://launchpad.net/bugs/77029
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