There’s a lot of wrong information floating on the internets. People that usually call no-OS X stuff “lesser operating systems” but with no clue about the different internals of a CDR image and an ISO image. CDR has a native OS X filesystem (HFS+), while ISO carries ISO9660. Just rename the CDR to ISO they say. It will be an ISO they say. However, that’s far from the truth.
The correct hdiutil command for converting a DMG to ISO is this one:
hdiutil makehybrid -iso -joliet -o output.iso input.dmg
file should return something like this:
file output.iso output.iso: ISO 9660 CD-ROM filesystem data 'LABEL'