The problem
An iso file is intended to be read off a CD rom. Inside a hard disk it is just one file that nobody understand including the Linux installer.
How to fix it
You expand the file by command
Code:
mount -t iso9660 -o ro,loop=/dev/loop0 {cdimgae} /mnt/cdrom
In the above you supply the "mounted" cd image in the
red bit above. You will then be able to see the full content inside the iso file in /mnt/cdrom.