TLDR: Try running modmii's hackmii solutions wizard, for real it might fix this issue
...
I think maybe installing a clean IOS58 (the top IOS prioritized by the hackmii installer) might fix the issue. Whatever IOS is being used to run the installer is getting hung up somewhere somehow, it could be a patched IOS from some legacy cioscorp garbage hacks. So modmii will save a boot.elf for mmm to the root of the SD card instead of the hackmii installer so that it will be launched by letterbomb (or "wilbrand" which is basically the same thing by
@giantpune, mad respect). This will allow you to install a clean IOS58 even if the wii is a total virgin (you can install officially signed Nintendo IOSs so long as they aren't fakesigned or a lower version number than what's currently installed). After doing that you can even use mmm's app launcher to load the hackmii installer so u don't need to move files on the SD card using a PC before using banner bomb again.