We demonstrate the optical detection of ultrasound using spectral hole burning in a cryogenic rare earth ion doped crystal. The dispersion due to the hole is used to perform phase to amplitude modulation conversion. This method allows sensitive detection of ultrasonic displacements with the advantage of large étendue. This method is also attractive as it requires only moderate absorption contrast to achieve high sensitivity. We also describe a method for diode laser stabilisation using optical feedback through spectral holes which dramatically reduces the laser phase noise.