To start, 2008 isn't a supported OS on the 2650, but have seen it installed.
That being said is the 2650 fully up to date on BIOS, ESM, and Raid?
How are you trying to install the OS? With the 2008 media itself, with the Dell Build and Update Utility, or another startup disk?
Also, when you started the install was there a previous OS present? If so, then you may want to delete and recreate the array and install fresh.
BIOS and Raid is up to date i believe ESM also-
Installing from 2008 media itself- Dell Build stalls.
No other OS present- array recreated.
I have not had any problems installing 2008 on 2650's. Have you tried different media, DVD burn, and/or download?
Have you given the array time enough to finish "initializing"? Try configuring RAID, then waiting a couple hours before starting to install.
31% during which phase ... Expanding Files?
If you have another server, you might try swapping the optical drive.
After double-checking, 2008 does not have OpenManage support for the 2650, meaning the install utilities won't work. The latest supported version of SBUU/SMTD for the 2650 is 5.5. I believe you need a minimum of 6.1 (or so) for 2008.
So, installing from the OS DVD is your only option (other than a network install). Some things to try when it doesn't "just install":
Flash, it is listed in the 2650 manual as not a supported OS.
It is listed as not supported, or it is not listed as supported? There's a big difference, and you know as well as I do that Dell doesn't update their docs (pet peeve ... I know they must have an unmanageable amount of documentation, but ... many docs are completely useless as they are so out-of-date). They don't even have 2003 listed 🙂