Um... I think this is your problem –
I'm pretty sure that HD Loader will not load from within itself. You are using a virtual drive to load another virtual drive.
I have HDadvance 2.0 with a patched hd loader v7c iso on my harddrive
i boot up the ps2 with hda disc and go to the menu screen and then click on the HDL (patched) iso that i downloaded and it launches HDL
If the HDA disc you have is a pressed copy (original) try installing the the HDL Exploit Installer Image. This might work out for you. Then you can install the exploit to teh MC and run HDL 0.7c from the HDD.
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