I'm also experiencing the bug : Ubuntu server 14.04.2.

Solution (that needs manual intervention) that works for me
# ALT+F2 to go to the shell, umount /media && mount /dev/sdb /cdrom
(supposing that the flash drive is /dev/sdb)

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https://bugs.launchpad.net/bugs/778319

Title:
  Installation via USB-stick impossible

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