ill try to do the following (i know its a bit weird ;):

boot an installation on an remote machine trough grub
which uses ssh
a fixed ip
and an installation source which is on the the harddisk

this means i have an grub entry like:

title Installation local/10.0
    kernel /boot/loader-P16680/linux vga=0x342 ramdisk_size=65536
install=hd:/hda3/10.0 hostip=10.10.101.178 netmask=255.255.0.0 ssh=1
sshpassword=blah
    initrd /boot/loader-P16680/initrd

with the kernel and initrd from the 10.0 instsys. If i start that, linuxrc
crashes after it detects the installation source.

if i use:

install=hd:/hda3/10.0 ssh=1 sshpassword=blah

it starts a normal installation (no network) from hd (no ssh)

if i use:

hostip=10.10.101.178 netmask=255.255.0.0 ssh=1 sshpassword=blah

it starts the dhcp client anyway (of course it finds no installation source but
thats expected)

if i use only: 

install=hd:/hda3/10.0

everything works as expected.

So looks like the combination of network/hd install is somehow not possible.