Testing with the 20160924 ISO resulted in the same error.

Typical QEMU CLI:
# qemu-img create -f qcow2 vdisk.img 4G
# qemu-system-x86_64 -enable-kvm -boot d -hda vdisk.img -cpu host -m 1024 
-cdrom yakkety-server-amd64.iso

Using SATA CD-ROM drive as suggested on IRC, also errored at the same place:
# qemu-system-x86_64 -enable-kvm -boot d -hda vdisk.img -cpu host -m 1024 
-device ahci,id=sata0,bus=pci.0,addr=0x8 -drive 
file=yakkety-server-amd64.iso,format=raw,if=none,media=cdrom,id=drive-sata0-0-0,readonly=on
 -device ide-cd,bus=sata0.0,drive=drive-sata0-0-0,id=sata0-0-0,bootindex=1

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https://bugs.launchpad.net/bugs/1626622

Title:
  yakkety server: fails to detect and mount CD-ROM

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