Ubuntu emergency LiveCD from harddisk (boot from iso file)

sudo su
mkdir /boot/iso
wget http://cdimage.ubuntu.com/daily-live/current/karmic-desktop-i386.iso -P /boot/iso
cat <<EOF>> /boot/grub/grub.cfg
menuentry "Ubuntu LiveCD" {
 loopback loop /boot/iso/karmic-desktop-i386.iso
 linux (loop)/casper/vmlinuz boot=casper iso-scan/filename=/boot/iso/karmic-desktop-i386.iso noprompt --
 initrd (loop)/casper/initrd.lz



While the boot process starts properly a few seconds later initramfs complains that it can not find the iso file. Is there a workaround so the machine boots to the desktop?

I really like the idea of having a machine that is always bootable, it would be perfect if the iso could be placed in its own partition, so one can even run an (unattended) installation from there. Is that also possible?