I'll work on this in a little bit, I believe you gotta go into your registry and change DiabloIICD in Software > Blizzard > DiabloII .. It should be pointed to your CD Drive, but you'd probably watn to change it to your Diablo folder so it doesn't try and read D: on load.
I have problems with D2Loader also.. It will load my D2 in windowed mode, and it comes up, but the second I click the screen (to get out of title screen & access menu) my game crashes. It also crashes if i use -skiptobnet command
so basically i cant open my game unless I use my original cd without d2loader...