Your virtual C: mount isn't ideal under Vista.
That would be better:
http://www.abandonia.com/vbullet/showthread.php?t=19982
Now about the CD image,
???
Did you alter the extension?
If the image is an ISO in the archive then there is something wrong with it, as Fantasy General is a mixed mode CD, ( I have ythe original CD), can only be a valid image if: BIN/CUE or CloneCD mixed mode image.
ISO can't hold the separate music tracks.
Gonna see what the archive size is ..... back in a second or two.
[Edit]
Back.
82MB? Can't be good, my CD is some 413MB.
I suppose the submitter didn't knew how to create a valid image, he has only the data track, misses most of the CD.
If I understand you swell:
There is a fantasy_ folder in the root of the CD image in the archive?
Nope, that's completely wrong.
Root should be music tracks + install bat+FG folder (and eventually ptchsnd folder, depends of the version).
I'm affraid you'll have to find yourself another download source, the CD image from riccso isn't good at all. (or maybe Ermuli haz it....?)