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My optical drive is an external one. Would that cause an issue?
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Yes, it sure can be an issue. Definitely, try plugging your optical drive into your motherboard ide port; the install will probably go from there. After a successful installation, you can try running the optical drive from the external enclosure. It may work OK. A lot of times these kinds of issues are caused by the needed driver modules not being available at boot time but the device works fine once the system fully boots up.