Hi,
Finally got this one licked!
My last resort was the update the system BIOS on the blade (which BTW I didn't think would make a difference but it needed to be done anyway so I had nothing to lose) and low and behold it worked!
It accessed the usb cdrom via /dev/hda1
My hardware platform is:
IBM BladeCenter (8766)
Initially the blades shipped with 1.04 of the BIOS and I updated this one to 1.06. It didn't work with 1.04 but did work with 1.06.
So if you haven't updated your BIOS yet, try that out!

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