I've successfully workarounded it, modifying the command line options
for grub with

all_generic_ide pci=nommconf

and for grub

ide=nodma acpi=off

Anyway I added those commands to the boot menu that appears after you
install ubuntu with grub, and such grub does come with an entry that
says "ACPI workarounds"  and in that entry the acpi=off is set but
misses the ide=nodma so it fails.

-- 
SQUASHFS error while booting from live cd
https://bugs.launchpad.net/bugs/172937
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