It turns out that the problem was due to USB 3.0 drivers. The newest Dell servers have only USB 3.0 ports and Windows Server 2008 R2 does not include USB 3.0 drivers, only USB 2.0 drivers. For the higher end R430/T430 servers you can change the USB support to 2.0 in the BIOS for installing older operating systems. For the R330/T330 and lower, it isn't possible to turn off USB 3.0 in the BIOS.
Ultimately the solution was to inject USB 3.0 drivers into the Windows Server 2008 R2 install media. Which sounds like a giant pain but Dell provides a utility that does it for you. The Driver Update Utility adds the USB 3.0 drivers and if you have other drivers, you have an option to add them also.
- Dell Driver Update Utility
- Instructions on how to use the Dell Driver Update Utility to add USB 3.0 drivers