EBS setup disables all network cards except for the LAN NIC during installation (the Security Server will enable its external NIC during setup). Hence, a data volume on an iSCSI drive connected through a network card will not be accessible during the installation and setup will fail because it is unable to write to the drive. During the installation process you will be prompted to choose a volume to store the data.
If you plan to use external drives connected through iSCSI , the installation will go through the initial steps successfully , but will fail when it tries to write data on the external drive. The only option at this stage is to cancel the setup and start the installation again. The solution is to select the system partition or another attached hard drive (i.e. a non-iSCSI drive) as the data partition during the installation. Once the installation is complete, you can add the external drive through iSCSI and move data to that drive manually.
Source:→ EBS Blog