I also had this problem with my GVP 1230 II setup and CF card as HD. In the afternoon I test it on my Blizzard 1260.
Try the following:
- Change your maxtransfer to 0x0000FE00.
- Install the latest version of WHDLoad version 16.9.
If the game still crash you could download older versions of WHDLOAD and put it on your hard disk, like WHDLOAD169.
When it fails you simply use an older version.