Hmm, okay. The LFN issue should not affect anything on the C64 end of things at all, unless you're using the program's option to mount a DOS filesystem directly as a virtual drive. If you're not doing that and only using disk images, there should be no reason the LFN issue would affect it, which leaves either the disk image, an issue with the program, or an issue with the hardware. The disk images ought to be good if they work in VICE, so we can probably rule that out. If you haven't already, try rebooting into DOS mode (either by pressing F5/F8 just when the BIOS starts booting Windows, or using a separate MS-DOS boot disk) and see if the program gives better results that way (a lot of hardware-hacky software really prefers vanilla DOS, and the C64HDD manual says it can be very timing-sensitive.) Also, as mentioned, check the parallel-port mode in the BIOS; it sounds like the program is more compatible with older parallel ports, so try setting it to SPP.