I have experienced a few hardware issues with one of my machines having some kind of allergic reaction to Mint 7 and 8 (as well as Ubuntu 9.04 and 9.10) even with compatibility mode. This is not my first rodeo with Linux, and I did try every trick I could find. I was frustrated, but Debian Lenny loaded on that one machine with absolutely no issue at all.
I did keep noticing the I/O and SQUASH/FS errors on the screen right before everything would grind to a halt. On the odd instances where I could actually get into the Ubiquity installer, the system would die at two different points, one of them at 66%, and I forget the other one, but it was somewhere around 30%. Basically, I had written off that machine as being Debian-Only. It worked flawlessly with Debian, so I was content enough.
When Linux Mint 8 came out, I downloaded it and burned it to a CD. I updated my Mint machine with a clean install. I loaned that CD to a friend (who never returned it, by the way), so I needed to burn a new disc. However, I ran out of CD-Rs that same day, and I figured I would use a DVD+R instead. Just as a test, I put that DVD with the regular Mint 8 64-bit version ISO in my finicky Debian machine, and to my amazement, it booted to the desktop in record time. I went back and burned a copy of Mint 7 64-bit to a DVD+R instead of a CD-R, and it booted up to a desktop, as well.
Making a long story short, I discovered that the finicky machine apparently had issues with SQUASH/FS on a CD, but did not have any problem with it on a DVD. The experts can explain the differences in how information is burned and stored differently on a CD vs DVD, but I just know that it I have no more problems with Linux Mint or Ubuntu on that machine as long as I burn the CD ISO to a DVD. I am not saying this will fix your problem, but if you have a spare DVD+R handy, it might be worth a few minutes to test it out.