Unfortunately I'm also in the same boat and was about to post a topic on this before seeing yours.
Some things that I did to narrow down the issue, which still not working for me, might give you some better results:
1) Which version of MAME are you running? I originally was using MameUI32 but heard that it doesn't look for the ini files so switched to regular MAME.
2) Make sure your ini folder is set correctly in your mame.ini file (in the ini folder in mame)
3) I'm sure you've already done this but the MAME setting in mame.ini also need to be
#
# VIDEO OPTIONS
#
video ddraw
numscreens 1
window 0
maximize 1
keepaspect 1
prescale 1
effect none
pause_brightness 0.65
waitvsync 0
syncrefresh 0
#
# DIRECTDRAW-SPECIFIC OPTIONS
#
hwstretch 0
#
# FULL SCREEN OPTIONS
#
triplebuffer 0
switchres 1
Since you are having the same problems as me though I'm sure you've done this already.
Sorry I can't be more help though as I'm also struggling desperately through this. If I find out a solution I'll be sure to post it. I'd appreciate it if you did the same
