Bug 778319 is about a similar (if no the same) issue. Could you try the
workaround described in comment #7?
"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)"
** Also affects: debian-installer (Ubuntu Yakkety)
Importance: Critical
Status: New
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https://bugs.launchpad.net/bugs/1626622
Title:
yakkety server: fails to detect and mount CD-ROM
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