Installer copies all files from local CD, and then reports error "failed to
create keyboard configuration; No such file or directory". After dismissing
the dialog I see a signal 11 message and system reboots.

This happens when I format and check for bad blocks, or not. I am doing a
Custom install with swap = 127MB, /boot = 16MB, and / = <rest of 1.5 GB>.
System is generic (GLC) PC, Pentium II processor (166 MHz), 128 MB Ram, 1.5
GB drive. Win95 is on another 1.5 GB drive.