Not with the information provided. If you said you’re able to get Minecraft to work, but not past a version, then you got it installed but I also don’t know where you got this notion of
PKG as a command to use. There’s also no reason why a successful installation should reference
sr0, the cdrom.
MineOS is two parts, the distro and the web interface. The web interface is what people actually care about for running Minecraft, but you’re using instructions and seeing errors unalike that what I would see if you were using the same distro I released.
So, what I’d recommend is to install a different distro, like Ubuntu server. There are hundreds of tutorials and installation vids and support forums for getting Linux running.
Once you know that it’s running, you can install the webui and use it just like if you installed MineOS Turnkey (and it worked for you).
But I’d emphasize to stop using MineOS Turnkey now, because who knows, it could be that your hardware isn’t supported by the ISO so I wouldn’t know how to go about fixing that. It’s just bizarre that you could get a server up and running with Java7 but then still get /init errors (which is part of booting a live disc, not an installed OS).
Different distro, same web interface. It’s designed to work on Linux, BSD, etc. There’s literally no downside.