Yup, have the virtual drive as drive D. With some old games, that's the only drive they check.

The games would give a message to insert the disc if they were looking in the wrong place for it.
Strange thing is that I just tried San Fransisco Rush the Rock Alcatraz and the audio tracks work fine for it.
The two that won't play cd audio are both Sega games from the same timeframe, so there must be something different about them.
I'll have to do some more searching and maybe try a few other image formats.