From: https://help.ubuntu.com/community/Grub2/ISOBoot#grml-rescueboot
grml-rescueboot
A very simple way of creating a GRUB menuentry for a bootable ISO file is to use grml-rescueboot.
The package does the following:
Creates a /boot/grml folder.
Automatically adds menuentries to the GRUB menu for any ISO files located in the /boot/grml folder. This is accomplished whenever the update-grub command is executed.
The created menuentry, when selected, provides submenu options on how to boot the ISO, including the “Try Ubuntu” and “Install” options.
To use the grml-rescueboot option:
Install grml-rescueboot
sudo apt-get install grml-rescueboot
Place bootable ISO files in the /boot/grml folder.
Since this is a system folder, the operation must be conducted as “root”. For example, if the ISO is located in the user’s Downloads folder, the command would be:
sudo mv ~/Downloads/<filename.iso> /boot/grml/
Update GRUB
sudo update-grub