I had the same problem on one of my servers that I was installing a subcriber ccm server for my lab at work. Both servers are real Cisco MCS7835 servers(HP/Compaq). It would ask for disc 3, and never do anything. It turns out, when I looked carefully, that I did not have a DVD drive at all. It was a regular CD-Rom drive. The hardware detection disc was a regular CD, then the rest of the set was DVD.
Hopefully this is your problem also. This is something you can overcome easily.