IIRC, the new WHDLoad have a fix for the Picasso/Mediator problem.
Download it and RTFM! :rtfm:
-EDIT-
I'm right (sort of):
You need to set VoodooInt to "NO" for whdload to work.
This env settings in is prefs/env-archive/Mediator.
Also you have to stop any TCP/IP stack you are currently running to avoid problems.
And RTFM of Whdload 16.4!