Update:
I read something on this forum about SanDisk USB sticks having some issues like maybe hidden junk that could cause issues. I've NOT been using SanDisk. I have 2 Samsung 16GB SDHC/Class-10 cards in USB adapters that I have been using without problems for a year. I also have a Lexar 1GB and a Kingston 8GB. I never had problems with any of them. I used them in 3 cars, a NAS drive, a Mac and 5 different PC's.
First some history:
I loaded the old LinuxCNC 2.5.0 iso on the Lexar 1GB because it would fit. When I tried (the first several times) to load LinuxCNC 2.7.4 iso I went to the Samsung 16GB because the iso was 1.1GB. That failed to load. I later used that same stick with an actual Debian 7.9.0 and that loaded without any problems. I tried 2.7.4 again (graphical install) and it failed. So I decided to try a 2.6 iso and found the 2.6.4 iso; downloaded that, put it on the Sansung 16GB stick (always using Linux Live software, LiLi). And it loaded. Wow. That would indicate no problem with the stick since both Debian 7.9.0 and the LinuxCNC2.6.4 iso both loaded okay.
Meanwhile ArcEye has been trying to help me. (THANKS for that!), Never the less, something was still not perfectly square with me. I.e. why was there ANY problem loading a bone stock LinuxCNC iso onto a very typical PC (<=3yrs old). I was thrown off track for a while by seeing posts where there seemed to be some issues with later (2.7.x) versions running on 64 bit CPU's (like my AMD Athlon 64). Maybe that was a wild goose chase, I still don't know.
Now:
This morning I remembered that piece about SanDisk and USB's. So I used LiLi and loaded LinuxCNC 2.7.4 onto my Kingston 8GB USB stick. (I never had any luck with infrarecorder) I walked out to my garage and started that PC with the Kingston 8GB USB in a back-panel USB slot and held F8 until the boot menu came up. I selected the Kingston (I always select it as a "classic" USB, never as a UEFI USB) and ran the graphical install. I just clicked off all the defaults until it came to the progress bar where it was installing the main system (where it previously bombed out) and my eyes got bigger as it passed the 1/4 to 1/3 point where it bombed before. It went to 100% finished and then completed the remainder of the install. Eureka!!! Now I have 2.7.4 up and running.
I started the Latency Test, I started 5 copies of glxgears, I opened LibreDraw and scribbled, I opened a terminal window, I opened some other app. I spread them in the 4 different windows. Then I watched the latency numbers. After 20 minutes they never climbed above 18,998 ns. With 2.6.4 they went to about 25,500ns.
Hopefully it's okay now. Hopefully there may have been some issue with the Samsung SDHC card that allowed it to work sometime but not always. Perhaps it was 'marginal'.