And if you enter loadwb after that, it says again "invalid resident library" ?
Does it access the CD drive and load files ?
If you enter
cd sys:
and
cd
what does the second cd reply ?
Please try this: edit the CD dosdriver (devs/dosdrivers/emergency_cd) on the floppy disk and check the MaxTransfer value. It's probably 0x1000000. Change it to 0x10000 and try again.
If it does not work, please compare the emergency_cd file with your CD0 file on the HDD and tell me the differences.
Edit: please also enter version c:loadwb.