I would not mess your system for a game, it's less trouble if you have to install Virtual PC or Windows 3.1 on DOSBox or whatever.
This could be the longest troubleshooting conversation ever on Abandonia,
and that's a lot to say. At this point you have invested so much effort that you really deserve to have a good solution, so even though there isn't much for me to add, because you already have expert help (with an attitude in Dosraiders's case), I feel compelled to add my two cents.
I think at this point your best and easiest choice is to use a virtual PC (and hope you're done after that). It isn't as hard as it looks, here you have an easy tutorial:
http://www.abandonia.com/vbullet/showthread.php?t=28390
I also have some tips to try to run old Windows games in modern versions, but it's more an art than a science, and if you don't manage with these few simple tips, I really think it's less trouble to resort to a virtual PC.
http://www.abandonia.com/vbullet/showthread.php?t=17501
I recommend to install Windows 95/98 on the virtual machine, as that version can also run Windows 3.1 programs with no compatibility issues. I don't recommend XP for this.