"Should the installer configure NFS share on this server to be used as an ISO Domain? ['yes'| 'no']  [yes] : yes

Local ISO domain path: /iso

Error: directory /iso is not empty"

my /iso is a separate ext4 filesystem which has "lost+found" directory.

I had to remove "lost+found" directory to get the iso domain created by 

engine-setup.

Thanks,

Jithin