Lubuntu 16.10 desktop ISO does not work without internet connection. The
ISO does not contain /pool with additional packages.
If you compare
http://cdimage.ubuntu.com/lubuntu/releases/16.10/release/lubuntu-16.10
-desktop-amd64.list with http://releases.ubuntu.com/yakkety/ubuntu-16.10
Status changed to 'Confirmed' because the bug affects multiple users.
** Changed in: grub-installer (Ubuntu)
Status: New => Confirmed
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https://bugs.launchpad.net/bugs/1633913