"error: invalid magic number" when booting from ISO loopback

[Ron <theoneandonlyron@gmail.com>]

Hi,

I was playing around with Grub2 (latest svn version) and its loopback
feature and had some problems to boot an ISO. The ISO file is the 32Bit
version of Ubuntu 9.10 which is located on a 8GB USB flash drive with
one FAT32 partition. I've tried to boot it with the following menu
entry:

menuentry "Ubuntu" {
    set isofile="/boot/isos/ubuntu-9.10-desktop-i386.iso"

    loopback loop $isofile 
    linux (loop)/casper/vmlinuz boot=casper iso-scan/filename=$isofile
quiet splash noprompt --
    initrd (loop)/casper/initrd.lz
}

This entry fails silently and when the commands were executed one by one
the linux command shows the error message "error: invalid magic number".

A short google search gave me the following similar bug report but no
solution:

http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=543924

I believe that Grub2 has some problems when the file is located nearly
at the end of the filesystem because I've put the file on the drive when
it was nearly full. Also I've checked the md5 value of the file under
Linux and it was correct but under Grub2 a crc value check shows a
mismatch. But the most interesting fact is that after I've deleted some
other files to make some space I made a copy from the ISO file on the
USB flash drive which booted without any problems.