I don’t have an answer but I’m having the same issue. I’m able to get through the internet recovery (command-option-r) and get to the utilities. I’ve erased my HD and when I go to install Lion it says I need 999.35 GB but have 998.68 available. Then I get the error message ‘Can’t download the additional components needed to install Mac OS X. Does this sound like I just don’t have enough space? I’m not having any success creating an external installation (don’t have a big enough flash drive and no external hard drives). Any thoughts are appreciated! I’m on my 7th hour trying to get my 2011 imac to work :)