You have to use the appropriate live-media-path settings. Have a look at the specific grub configuration 
file. Please also consider using the provided loopback.cfg file (or if you have an older grub version use 
the boot/grub/%SHORT_NAME%_default.cfg file)

To provide the additional kernel parameters you would have to export them via:

set kernelopts="ssh ...."
export kernelopts

before loading the configfile.