How to create a bootable hard disk image from an iso image

Seems to be pretty straightforward to do with genisoimage, in the package with the same name on Debian:

genisoimage -o output_image.iso directory_name

There are many options to cover different cases, so you should check the man page to see what fits your particular use case.

See also

• How-To: Create ISO Images from Command-Line

Yes, you can accomplish this by adding a menu entry to the GRUB boot loader menu.

You can add a custom GRUB menu entry by editing /etc/grub.d/40_custom,

Example of custom menuentry:

 exec tail -n +3 $0
# This file provides an easy way to add custom menu entries.  Simply type the
# menu entries you want to add after this comment.  Be careful not to change
# the 'exec tail' line above.  

menuentry "Trisquel ISO" {
        set isofile="/Operating_Systems/Trisquel_7.0_i686/trisquel_7.0_i686.iso"
        loopback loop (hd0,5)$isofile
        linux (loop)/casper/vmlinuz boot=casper iso-scan/filename=$isofile quiet splash
        initrd (loop)/casper/initrd
}

Instruction & Explanation:

1. The command set is used for storing the path of the ISO file into a variable, here isofile.

2. loopback is used to make a device from a file system image. In order to do that, it is necessary to specify the device and image file. Here we used (hd0,5)$isofile in which (hd0,5) represents the fifth partition of the disk.

   • Points to note: In (hd0,5) ,
     1^st digit represents the device number which starts from 0 (here : 0 = 1^st device) and
     2^nd digit represents the partition number which starts from 1 (here 5 = 5^th partition).
     That means /dev/sda5
   • And variable $isofile has the path of the ISO file. So, finally it becomes (hd0,5)/Operating_Systems/Trisquel_7.0_i686/trisquel_7.0_i686.iso.
   • For more information, visit : How to specify devices and files.
     
     

3. linux command is used to load Linux kernel (vmlinuz) from file. Put the path of Linux kernel in the ISO.

   • Read/extract the content of ISO to get the path of kernel example:

      $ 7z l trisquel_7.0_i686.iso | grep vmlinu
      2014-10-29 21:41:43 .....      5841680      5841680  casper/vmlinuz
      2014-11-03 00:45:09 .....      5844176      5844176  casper/vmlinuz.netinst
     

     so, /casper/vmlinuz was used here.

4. initrd command is used to load an initial ramdisk for a Linux kernel image, and set the appropriate parameters in the Linux setup area in memory.

   • initrd is a scheme for loading a temporary root file system into memory. Put the path of initrd in the ISO.

   • Read/extract the content of ISO to get the path of initrd:

     $ 7z l trisquel_7.0_i686.iso | grep initrd
     2014-11-03 00:45:19 .....     16851900     16851900  casper/initrd
     2014-11-03 00:45:09 .....      9398592      9398592  casper/initrd.netinst
     

5. The additional parameter such as boot=casper iso-scan/filename=$isofile noprompt noeject may be specific to a GNU/Linux distribution and vary for another family of Linux. You can find some configurations for different family/distribution from here.

   Note: Some distributions use initrd.gz or initrd.lz depending upon the algorithm/compression used.

After editing /etc/grub.d/40_custom, GRUB needs to be updated by update-grub2 command. Upon rebooting, you will find the custom menuentry you've added on the GRUB screen. And you may use the Live environment of a GNU/Linux distribution.

In order to perform installation from ISO, installer may need to unmount any mounted partitions; i.e. say another system is mounted at /isodevice, then you can umount -l /isodevice.