diff --git a/anaconda/backend.py b/anaconda/backend.py
index 2ec2109..713278b 100644
--- a/anaconda/backend.py
+++ b/anaconda/backend.py
@@ -188,7 +188,7 @@ class AnacondaBackend:
             return 1
 
         isys.lochangefd("/dev/loop0", self._loopbackFile)
-        if os.path.ismount("/mnt/stage2"):
+        if os.path.ismount("/mnt/stage2") and not anaconda.methodstr.find("/mnt/stage2") >= 0:
             isys.umount("/mnt/stage2")
 
     def removeInstallImage(self):
diff --git a/anaconda/scripts/mk-images.x86 b/anaconda/scripts/mk-images.x86
index 39fb142..228da60 100644
--- a/anaconda/scripts/mk-images.x86
+++ b/anaconda/scripts/mk-images.x86
@@ -100,7 +100,7 @@ makeBootImages() {
 
 	# insert XEN boot options
 	sed -i 's/kernel vmlinuz/kernel mboot.c32/' $MBD_BOOTTREE/isolinux.cfg
-	sed -i "s/append initrd=[^ ]*\(.*\)/append $xenimage --- $kernelimage stage2=hd:LABEL=\"$CDLABEL\"\1 --- $initrd/" $MBD_BOOTTREE/isolinux.cfg
+	sed -i "s/append initrd=[^ ]*\(.*\)/append $xenimage --- $kernelimage stage2=hd:LABEL=\"$CDLABEL\":\/images\/install.img repo=file:\/mnt\/stage2\1 --- $initrd/" $MBD_BOOTTREE/isolinux.cfg
 
 	# copy in memtest if present
 	if [ -f $IMGPATH/usr/lib/anaconda-runtime/boot/memtest* ]; then
diff --git a/anaconda/yuminstall.py b/anaconda/yuminstall.py
index ff9c7a3..478bbae 100644
--- a/anaconda/yuminstall.py
+++ b/anaconda/yuminstall.py
@@ -492,6 +492,10 @@ class AnacondaYum(YumSorter):
                 self._switchCD(1)
                 self.mediagrabber = self.mediaHandler
                 self._baseRepoURL = "file://%s" % self.tree
+            elif m.startswith("file:"):
+                self.tree = m[5:]
+                self._baseRepoURL = "file://%s" % self.tree
+
         else:
             # No methodstr was given.  In order to find an installation source,
             # we should first check to see if there's a CD/DVD with packages