I confirm the issu when trying to install 16.04 LTS from a pendrive.
I chose Something Else and tried to create an ext2 boot partition, an ext4 
system partition, a swap partition and a home partition.
It hangs while creating ext2 file system, as described by Eric Brunzell.
Tried for three times, same issue.
Then used GParted to manually create the partitions.
When chose Something Else, I only had to modify the partitions to assign mount 
points.
This time it worked.

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https://bugs.launchpad.net/bugs/1361951

Title:
  mke2fs asks for input when formatting over a partition table

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