I am seeing the same thing, running Ubuntu 8.04.3 Jeos using KVM
virtualization.  It eats up 100% CPU, however I can hit ALT-F2 to get to
a terminal.

But searching with Google for "scanning the mirror" shows there are
others having this problem on non-Virtual machines.

Some have reported success by unplugging the NIC cable, or, by manually
fixing a DNS entry before starting the install.  I'm getting this error,
but the shell at ALT-F2 still lets me ping sites like Google and Yahoo.
So, my network works for pings, but there is still some problem at the
"scanning the mirror" phase.

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[intrepid jaunty] installation freezes on scanning the mirror
https://bugs.launchpad.net/bugs/154550
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