maybe the image file is corrupted, or has an odd filesystem type.
I had the impression that iso9660 format is automatically detected.
Is this a cd or a dvd image?
isoinfo -d -i <image_file>
this should display you some info about the image
also, what distro are you running? Have you tried to mount another iso image? maybe the feature is disabled in the kernel, which I doubt..
P.S. By the way...Welcome to LQ Forums