Booting Live-ISO over PXE+HTTP using Grub loopback

[Beeblebrox <zaphod@berentweb.com>]

Hi.
I'm trying to boot several Debian based live ISO's (including Jessie) using my PXE-boot server and Grub loopback method. ISO's are fetched by Grub from an HTTP server on the same host.
* Using Grub's loopback, I can boot the kernels of all live ISO's through PXE+HTTP transfer.
* Boot process fails at mount-root stage, which obviously will not be mounted from NFS but rather from the ISO its self. Error message is usually similar "could not find the ISO" or "unable to find medium containing a live file system". On Debian_Jessie ISO, the install process starts, then complains that there is no CD-ROM.
* Most PXE related solutions I come across involve extracting the iso image before-hand, then calling the extracted vmlinuz and initrd. This is not of much interest.
* A sample menu entry would be:
    menuentry "Debian-testing-i386-lxde.iso"" --class gnu-linux --class gnu --class os {
  set root="http,192.168.2.100"
  set isofile="debian-testing-i386-lxde-CD-1.iso"
  loopback loop0 ($root)/iso/$isofile
  linux (loop0)/install.386/vmlinuz
  initrd (loop0)/install.386/initrd.gz
As stated, this boots the kernel but canot mount rootfs.

As the first step of solving this problem, what I'd first like to know is: When booting an ISO over PXE+HTTP and mount-root fails, how can the rootfs on live-CD be loaded to the ramdisk? Is ISO modification the only choice, or is it possible to boot a normal ISO by passing the correct parameters to grub.cfg?

I'm not very interested in solutions that involve "generating custom debian iso" or "downloading the Debian-PXE ISO". My main objective in asking the question is to find a general solution for all Debian-based ISO's.

Regards