....If any one can be of assistance, to determine my problem, its appreciated.....
Sorry bout digging up an old thread, but stumbled on this post in trying to achieve the same thing (mass chd conversion) and thought I may be able to answer the above issue in case anybody else discovers this post and wants to use the script.
Anyhoo, from the OP's error they are receiving I am guessing that they have created a new directory for the "new_dir" variable yet have left it empty (ie - doesnt contain folders named the same as the CHD folders in the old directory).
I had the same issue whereby I wanted to output the converted CHD's to a brand new location but didn't want to manually created 30 odd empty folders manually. One way to overcome this is to populate the new folder directory with empty folders named identically to those CHD folders in the old folder location ("old_dir") by using the command "MKDIR "%new_dir%\%%a" in the script before it executes the chdman command.
BTW - I don't think the following is required in the script, but have left them in for the time being,:
1. "|find /v "_ReadMe_.txt" - this ignores the "_ReadMe_.text" file, but it wouldn't look in it anyway as its not a folder
2. You won't need the 'n' at the end of "chdman -update "%old_dir%\%%a\%%b" "%new_dir%\%%a\%%b"n" as you are copying to a new location.
3. Same reason as above, you won't need the line "ren "%new_dir%\%%a\%%b"n "%%b""
i.e:
@echo off
set old_dir=H:\mamechdsold
set new_dir=H:\mamechdsnew
set chdman=chdman.exe
for /F %%a in ('dir /b /a:d %old_dir%^|find /v "_ReadMe_.txt"') DO (
for /F %%b in ('dir /b "%old_dir%\%%a"') do (
echo Converting: %%b
MKDIR "%new_dir%\%%a"
chdman -update "%old_dir%\%%a\%%b" "%new_dir%\%%a\%%b"n
del "%old_dir%\%%a\%%b"
ren "%new_dir%\%%a\%%b"n "%%b"
)
)
Hope this helps

(and works lol)