Be aware of corrupted USB storage devices!
I ran in to this issue as I re-installed a test Proxmox 8.1-1 node today and found this thread.
Two days ago I did a first attempt to install a Proxmox 8.1-1 node. I used a 32 GB USB drive and used Rufus to create a bootable install drive. USB drive was working flawlessly. Only issue I ran in to was that graphical installation just returned a black screen, so installation had to be done in console mode. Deployed using ZFS RAID0 file system on a single NVME SSD.
Today It was time to do a maiden proxmox installation to get a clean start. Used the same USB drive as before but ran in to the error:
Code:
command 'unsquashfs -f -dest /target -I /cdrom/pve-base.squashfs' failed with exit code 1 at /usr/share/perl5/Proxmox/Install.pm line 906
Googled around and found this thread,
Used my trusted USB drive and re-did the creation of bootable installer with a sha256-verified ISO file. But with same result.
Found an older thread mentioning that balenaEtcher was a more robust option for creating the installation media. Walked down that path, but still got the error. However, this time the installation console threw another error message indicating I/O error on my USB storage device.
Did a third attempt where I used another USB drive, created a bootable install USB using balenaEtcher, and crossed by fingers. This time it finally worked.
This just goes to show that there is no such thing as a trusted USB storage drive!