Mountain Lion fails to install from Recovery Partition or USB Stick

I'm having trouble installing a Mountain Lion Virtual machine using Parallels 8 from either the recovery partition or a USB stick.

Unlike other posts, it looks like the recovery partition is being mounted since I see the apple logo come up and the progress wheel, but then it drops back to the Start screen. "Click to start"

I'm not sure where to look for the logs to add any additional information.
Any ideas?

Youtube Video:
http://youtu.be/aCDRmTheSn4

 

Fixed by http://kb.parallels.com/116282.

Turns out you need to increase the Video Memory to 128MB.