I had similar problems running an external mounted
Yamaha with my system under WB 2.04 and 2.1 with my gvpscsi.device.
Doomy is right about AsimCDFS as it worked fine on my system. However there is the free distributable package on Aminet:
amicdfsThe line in your CD0:
Control = "MD=0 LC=1 DC=8 S NC L LV AL LFC=1 HR=.rsrc Q"
Perhaps this is giving you problems, as it may be arguments for different make of CD-ROM.

Perhaps try to comment out this line and see if it works, as I had to do this on mine using AMICDFS.