This is what i did to get it to work without the USB
Install it with the USB to HDD option, while having the USB plugged in to the following
sudo umount /dev/sda1
sudo fsck.hfsplus /dev/sda1
sudo mount /dev/sda1 /boot
Run that until you can write to /boot, use sudo touch /boot/test to see if it mounted R/W
Basically it mounts sda1 as Read only unless you do the fsck.hfsplus then mounts it R/W
sudo cp /media/untitled/com.apple.Boot.plist /boot/com.apple.Boot.plist
or edit /boot/com.apple.Boot.plist and make sure root= is: root=/dev/sda2
sudo shutdown -h now
Remove the USB and power on
Should now install again but this time it will work, next time it restarts and not loop the formatting/installation process!