Any Recommendation on creating a custom iso from installed OS

[robinsmidsrod]

The reason you're stopping at busybox is because once the linux kernel starts and starts using its drivers, the sanbooted CD is no longer accessible to the operating system, which is causing a drop to busybox.

A netbootable ISO must support some way of fetching its files from a network location instead of the local CDROM drive. My guess is your custom ISO doesn't do that. All files needed to bring up network and fetch the extra files must be inside the initrd.

You can see how I do it for Ubuntu in the ubuntu-installer menu options here: https://gist.github.com/robinsmidsrod/2234639