I have exactly a same problem. I believe the frozen process is from
/lib/partman/init.d35/dump. The following line is frozen:

rm /var/log/partition_dump

The problem is for some reasons directory /var/log is locked (I can't
even list files in the directory) when the installer is running.

My workaround is just comment the line before run the installer. It
works.

-- 
live install routine ubuntu 7.10BETA freezing
https://bugs.launchpad.net/bugs/145836
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