Not exactly the same scenario as the OP but here is what I found that solved this problem.
At first I made a bootable SD card with the Win7 Ultimate install on it. It booted fine, started install fine but failed shortly in with the dreaded "can't find CD/DVD driver" message. When I browsed, I found only the temporary drive in memory (X:) and no sign of the SD card as a drive.
What I eventually did is create a bootable SD card with a bootable version of Win7 on it (not the installer, actual Win7). I found an image already out on the web for this. Then I created a separate USB stick with the Win7 install on it. While the SD card was still invisible after booting into windows, when I put the USB stick in, it was recognized and I was able to start Windows 7 install and get past the point where the driver error comes up.
Again, not the same thing as the OP using an actual disk but perhaps this info will help narrow down what the issue is and how to avoid it for others.