Hmmm, well, ain't this an interesting case...
1st of all, forget about Scenario 1, completely. It is not done that way.
Now, regarding Scenario 2... I take it, it just sits @ the flashing black screen until you give up & open the optical drive. It's always possible, sure, but, extremely unlikely the disc is bad. Try this... take the HDD out, go format it (NOT Quick Format) on another or w/ another machine. Put it back in & try installing again.
Report back, please
Thanks,
Drew