I failed to reproduce this with a current daily build of natty-
server-i386.iso, unauthenticated, in kvm with ietd running on the host.
My /etc/network/interfaces is identical to that in comment 1.  I did
find a problem with netcfg that was tearing down the DHCP lease near the
end of the installer before unmounting /target, so some finalisation
steps didn't happen and it might not have written everything to disk; I
suppose in theory that could account for this.  I've uploaded a fix for
that.

Perhaps somebody could try again with tomorrow's (not today's) daily
build, and see if it's cleared up?

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https://bugs.launchpad.net/bugs/728088

Title:
  iscsi root (amd64) with or without auth fails to boot

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