If I remove the isoscan kernel option in the Lucid 10.04 LTS 3 I get a 'Can't open /dev/sr0: No medium found' error message and the system won't boot to the LiveCD Desktop. Here is the menuentry I am using:

menuentry 'ISO Lucid.1 64 ' {
loopback loop (hd1,6)/iso/$isofile
linux (loop)/casper/vmlinuz boot=casper iso-scan/filename=/iso/$isofile noprompt noeject
initrd (loop)/casper/initrd.lz