"Recovery system can't be created" error when reinstalling Lion from recovery system

Question

I get the infamous OS installation error "Install failed... because a recovery system can't be created" – but in fact, the recovery system already exists, since I'm installing from it, and incidentally, I've previously already used it for an Internet reinstallation. I've tried about a half dozen iterations now.
Here's the exact sequence of events:
Reboot on recovery drive.
Select option to reinstall the OS from the network.
License agreement, etc; then select drive -> install -> sign into Apple store.
"Downloading additional components" message. 1st attempt consistently fails at this stage, need to restart at step 2.
Download for roughly 20 minutes, then automatic reboot -> "Installing Mac OS X".
After about 10 minutes: "Install failed. Mac OS X could not be installed on your computer. Mac OS X can't be installed on the disk ..., because a recovery system can't be created. Visit www.apple.com/support/no-recovery to learn more."
I've pawed through innumerable posts of people who have gotten the same error message, but haven't found one that reproduces my circumstances. I've reviewed the KB articles "OS X: About OS X Recovery" and "OS X Lion: Installer reports This disk cannot be used to start up your computer", with no luck. Based on a suggestion in the second KB article, I've reduced the primary partition size by roughly a GB and retried - no luck.
See this thread if you want to know why I'm reinstalling the OS, even though it's (more or less) functioning and I have Time Machine backups. It would also make me feel a lot better to know that the reinstallation would work in case of real need. Thanks in advance for any help.
-- Phil

Answer 1

Philip Keller wrote:
John,
I think I'm "reinstalling OS X by booting OS X Recovery": I reboot with command-R depressed, or I reboot with Alt depressed and choose the recovery parition, and then I start the installation process from the list of things I can do. Are we talking about the same thing?
Yes, exactly.
I think that OS X Internet Recovery would be necessary only if you were to attempt a Lion installation with a completely empty HD, implying that even a Recovery partition has not been created. Your USB flash drive is the way to cope in that circumstance. If you can install Lion by booting the recovery partition as you described, it seems to me that it is all that is necessary and there is nothing to fix, despite the error message you see.
I'm surprised that Internet Recovery works at all, given that your Mac is not one of those allegedly eligible to use it.
Without a similar 2006 iMac to test, I can only speculate that the "abysmal distribution system" as baltwo describes it just doesn't work well with earlier Macs, and that Apple may not have tested it extensively with them. If I were you I would rely upon that USB installer much more than OS X Recovery or OS X Internet Recovery. I prefer not to rely upon any installation method that can possibly result in "the server is not available at this time" or such nonsense, but that is the direction in which Apple has been going for a long time.
An OS X installation log exists at /var/log/ that you can examine using Console, probably named "install.log". Deciphering it is another challenge.