Verified on vt20.2
images with .ISO extensions are seen on the list of change CD,
and picking it from this list, end up successfully:
Event:
"CD IPXE.ISO was inserted to VM test by admin@internal"
Since the problem described in this bug report should be
resolved in a recent advisory, it has been closed with a
resolution of ERRATA.
For information on the advisory, and where to find the updated
files, follow the link below.
If the solution does not work for you, open a new bug report.
https://rhn.redhat.com/errata/RHBA-2016-0315.html