I see that someone else just reported the same problem in
comp.unix.bsd.netbsd.misc and that there is already an open
PR 20335.

To recap, after successfully creating the new fs on the target
hard disk, sysinst coredumps with a 'fs full' error when attempting
to select the source for the installation 'sets'.

The filesystem which is 'full' is the ramdisk mounted as /
and in my case was 2.3 megabytes in size with 2 megabytes used.
This is on a desktop i386 with 512 megabytes of RAM, so there is
no reason to make the ramdisk so small.

I made the install floppies on my working 1.6U desktop machine
which is current as of yesterday.