Hmm.. It's been so long since I had to install a version of OS3.0 that I can't remember the order the go in. When your asked to insert the workbench disk does anything happe, ie:- can you hear the drives heads moving back & forth trying to read the disk, does the floppy led come on.
Try inserting all the disk one after another when it asks you for the workbench disk just in case your inserting the wrong disk, although it doesn't sound like it.
It could be the CF is not formated properly or has errors/is faulty is there any way you could format the CF on a PC for example, as there was another thread running where someone was having similar difficulty as you and after he had formated the CF on a PC then reformated it on the Amiga everything went fine for him.
If your not getting any further an the first install disk then when you try to boot up with that card, you won't get anywhere as their will no Workbench installed on the card and all you'll get on bootup is a plain on cli window.
Sorry I can't be much more help at the moment, but I'll have a look around the sites and see if I can find something to help you.
Cheers
Franko