Linux – Failed to install Kali Linux by USB drive

You could resolve the error by repeating the steps :

Run the installer.

Open a shell (ALT + F2).

Create the directory cdrom directly on the root of the file system:

mkdir /cdrom

Note : If you got problems making the directory /cdrom, disable the CD-rom player in BIOS or disconnect the cable

Mount the USB as if it is a CD-ROM:

mount -t vfat /dev/sdb1 /cdrom

Where sdb1 is your USB device.

You could carry on installation now

After executing mount -t vfat /dev/sdb1 /cdrom, cd into the /cdrom directory and do an ls to see if the files are there. Then press ALT-F1 to go back, continue and re-select "detect CDROM"

Source :ubuntu and debian

Another layman solution was :

when the Window shows CDROM couldn't be mounted ,

1. Unplug your USB from system and re insert it

2. wait for mount/ detection (usb LED glow)

3. Hit Continue

You could do what I did. Hit escape, type install, hit enter, skip CD drive.

You could solve your problem by following these steps :

Find out which devices are available by typing ls

Set to the correct value :

set prefix=(hd0,1)/grub
set root=(hd0,1)
insmod normal
normal

The above commands will get you out of the rescue mode to the normal terminal mode. After the above commands you can go ahead and start the rest of the settings.

insmod linux 
linux /vmlinuz root=/dev/sdXY ro 

If the above command doesnt work try this :

linux /boot/vmlinuz-3.2.0-14-generic root=/dev/sda1 ro
boot

Additionally dont forget to update your grub

Update the GRUB config file.:

sudo update-grub

Reinstallation of Grub on the device:

sudo grub-install /dev/sdX

hope it helps