Packer creates the VM and after that reads the ISO from the content library. Your build is failing in the VM creation and the problem is not related with reading the ISO from the Content Library.
You’re right that the logs are not verbose enough to know exactly where in the creation the build failed but I don’t blame Packer for this. I’m looking at the code and the process doesn’t fail but when Packer checks the created Object it doesn’t contain the expected VM.
Could you rerun the build with -on-erro=ask, just like you did, and check from the UI if the VM is there being created?