12.04 server 32bit fails install using USB drive

I tried to install Ubuntu 12.04 Server (32bit) on a machine using a USB stick. I used the Universal-USB-Installer-1.8.9.4 which has support for 12.04 server but you can also replicate the problem with LinuxLive USB Creator 2.8.11 or unetbootin 575.

The computer boots up the installation process ok.
It gets through the Ubuntu language, locale and keyboard selection.
Then starts loading additional components. At this point it gets about a quarter of the way through then throws big error message saying "There was a problem reading data from the CD-ROM."

http://i.stack.imgur.com/AKh0s.jpg

Retrying obviously fails as well. I tried checking for CD-ROM integrity errors and it breaks every time on this error:

http://i.stack.imgur.com/I3J9t.jpg

The ISO SHA1 hashes match for the downloaded file. Basically a guy 'hre1' found the problem on askubuntu.com. It seems there are some naming errors with the files under \pool\main\l\linux in the ISO file. There are false extensions *.ude instead of *.udeb there and a MD5-Checksum error with ./install/netboot/ubuntu-installer/i386/pxelinux.cfg/default. After fixing these errors it's possible to install the 32 bit server edition.

Basically this only occurs when installing from a USB disk because I managed to successfully install the same ISO file from a written DVD-RW.

So please fix the naming of these files and update the master ISO on the site.