as I understand it, it is when trying to mount the CD you get the Rigid Disk Bootblock Error? Perhaps the SCSIMounter is only for harddrives?
I haven't used my squirrel in a long time but I don't think I ever had to use SCSIMounter, I just ran the install (without getting any errors!), rebooted and it worked fine
*edit*
Try removing everything from your WBStartup, set Workbench to a low resolution and few colors, and retry the install.
