Here's another idea:
Maybe adapt some beginscript (knoppix-autoconfig, or something else ??) in order to copy at boot the home img-file from a known directory from the cd to a ramdisk mount ? And then together use the option home=/locationofimgfileinramdrive .. ?
Since I'm a linux newbie I don't know much about which files are doiing what .So these 2 questions here above are just questions to point me out if these ideas are just ridicule or if they are do-able (and if they are do-able maybe point me out which files to adapt ?).