I finally got it working!

Part of the problem was that the CD-Rom cable was providing a crappy connection. We fashioned our own single pin connectors using some connectors purchased at Radio Shack. Here is the connection in use:

I also gave up on the ground pin on the IPAC and just used the other ground screw terminal. In addition, I had to connect the rotary harness metal side up, even though Druin's docs say to have it down. Oh well, it's working now, and all I have to do is tailor the sensitivity for each game. By default, in Ikari Warriors, the diagonals were getting skipped.
Thanks for the help from everyone, especially Druin.
