For what it is worth, the CD driver built-in to OS3.1 is utter crap. When I upgraded to 3.9, oddly all I had issues with was CD support. I eventually 'downgraded' to Asim CDFS 3.10 .
Hmm, you are booting from the emergency disk and then installing, correct?
Maybe you can have someone make and send you an Emerg. disk?
Also, with the 're-boot' that occurs with OS 3.5/3.9 , only after an OS install, I always had to do a cold start, no reboot... if a warm boot was done after 3.9 install, I had issues as well...
odd tho, Sandman, I have NEVER seen an error like that installing OS 3.5 or 3.9 ... weird