I just ran into an issue for the second time that originally came up for me before the end of last year. While deploying new UCS C220 servers for a customer using Flex Flash as the OS drive, I attempted to install ESXi using the Cisco Custom Image and during the install immediately got this error message:
As soon as I saw this, I began to vaguely recall going through the same motions about 3 months ago. A real quick search immediately brought me to this post by Ivo Beerens which precisely described the exact situation I had stumbled upon. While the solution Ivo posted had the fix in for this, there is a bit of an updated screen shot / process for the new M5 servers with updated CIMC code:
In place of Format SD Cards, the new CIMC console requires drilling down to the Flex Flash controller, selecting the Virtual Drives tab, then selecting the drive itself and clicking the Erase Virtual Drive button. The erase process only took maybe 3 minutes and the subsequent install went through as expected.