*Update*
This seems to work:
Mount your virtual C; (of course ....)
Mount the game folder directly as A:
(
mount a x:\path\phantas3 -t floppy )
From A prompt run
makehard
This will create a ph3 folder on your virtual C and copy/create the needed files
Now run the game from your virtual C:
If you did it all right you won't get that error message when you select 'yes' when asked if you run from harddrive, and save/load game seem to work now.
Next time no need to mount that A again.
[Edit]
....Or download this one:
PH3.zip - 0.17MB