If you haven't found a solution yet, here's how I did it (assuming your installing from a .dmg/usb drive).
Go to the folder payloads/AdobePhotoshopElements6All (payloads is in the same location as Setup.app).
Open the file AdobePhotoshopElements6All.proxy.xml and search for 1024
right around there is the line:
Edit it so that the value for height is less than 600, save and the installation should go well
EDIT: just realised you're trying it with ps elements 8, what I did worked with 6.0. I would think something similar would work with 8 as well, but can't guarantee it.