Bug#728126: Bug #728126
I just encountered the same bug on two Dell Poweredge 1950 systems, and after some googling discovered the answer in the Dell tech support knowledge base:
TL;DR: The USB drive emulation subsystem in the PE1950, when set to 'auto' guesses wrong when trying to identify a debian netinst USB image and tries to treat it as a floppy. Force the emulation mode to 'Hard Disk' in the BIOS and the installer will run smoothly.
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