Let me repeat it for you.
1. You must mount image in Daemon tools (and keep it mounted during play).
2. You must mount now "double-virtual" CD - DT CD as DOSBox CD with
mount X -t cdrom X:\ -iosctrl command (where X is generic CD letter - you need actual DT-mounted one).
3. Install the game from this CD.
4. Play. In the same session, with CD mounted.
4.1. In an other session you need to mount CD again, at the same letter as you did in p.2.
Wasn't it work for you?