This probably is your virtual iLO cd drive. Can you disconnect it completly in the iLO screen and try the installation via usb key again?
You are basically getting into an APD state during your installation that is why it is freezing. Seeing that you are having similar issues installing Windows it is not likely that this is a VMware issue.
You can also check if other virtual devices are presented to that host as I vaguely remember IBM hosts do have a vusb0 device after installation which should be caused by the IMM, so I would start looking in that configuration as well.