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I've never had this problem, mainly because I'm usually always connected to the internet, but just querying the location of your /mnt/DVD did you create that, because most removable drive now end up in /media/
Also, I noticed you're mounting the .iso, would be possible, to make the DVD itself. However you do not have to rely on yum for removal and can usually get by using:
su -c "rpm -e packagename"
Also what about just adding that entry into your yum repo directory, or yum.conf and don't enable it unless you want to remove, and you can disable all the others, I haven't tested this out though, and don't think I would to be honest.
Another tip though, if you want to install a package locally, YUM won't install if there's no GPG matching key, but to do that, just turn off gpgcheck in yum.conf and localinstalls will work fine. Otherwise using the rpm -ivh packagename can install it too.
e.g.
su -c "yum -y localinstall /home/user/packagename.rpm"
or
su -c "rpm -ivh /home/user/packagename.rpm"
The add/remove software in Fedora 5 just does not work if you machine is not connected to the Internet. It wont add or remove any package for you even though you have the disks.
If you read files in /etc/yum.repos.d/, you will understand. Fedora 5 will connect to redhat's website when you want to update your Fedora.
Here is a simple way to update your fedora 5 via FC5 iso file. 1, move all files, which are under /etc/yum.repos.d directory, to other directory. for example, backup directory.
2. create a new directory *.reop in /etc/dym.repos.d Copy and Paste the following text into it and save it