I tried all the answers here and more google results, but none worked. I eventually figured it out, the issue is the file format is not vfat, but iso9660.
When you get the CDROM not found error follow these steps:
Enter a shell (CTRL+Alt+F2)
Note: Kali told me to press (Alt+F2), but this didn't work
Get a list of devices with blkid:
~ # blkid
/dev/sdc1: UUID="2018-04-12-12-04-16-00" LABEL="Kali Live" TYPE="iso9660" PARTUUID="81c5e086-01"
Note: I have shortened my list to the relevant row. Also you can see the storage type is iso9660, not vfat
Mount the Kali CD with the mount command:
~ # mount -t iso9660 /dev/sdc1 /cdrom
Check the contents of /cdrom are as expected:
~ # ls /cdrom
autorun.inf efi g2ldr.mbr md5sum.txt win32-loader.ini
boot efi.img install pool
debian firmware isolinux setup.exe
dists g2ldr live tools
Switch back to the installer (CTRL+Alt+F5)
Note: Kali told me to press (Alt+F1), but this didn't work. I tried F1 through to F5 until I found the correct combination
From the menu tell it to mount the CDROM, if asked choose /dev/sdc1 and /cdrom. I know we have already mounted the drive, but for some reason this step didn't work previously, but worked fine after following the previous steps.
The install will now continue as normal.