This is due to problems reading from the CD. You apparently didn't
attach the full /var/log/syslog, but no matter, because this doesn't
happen on working CDs:

Sep 17 12:55:00 ubuntu grub-installer: /sbin/grub-install: line 391:
//sbin/grub: cannot execute binary file

I suggest burning the CD at a lower speed (if applicable) and cleaning
the CD drive lens with the sort of cleaning kit you can get at
electronics shops; then perform a CD integrity check before starting the
install again.

** Changed in: ubiquity (Ubuntu)
       Status: Unconfirmed => Rejected

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Installer Crashes REPEATEDLY "Unable to install GRUB in (hd0)"
https://launchpad.net/bugs/60911

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