Odd, Einhander works for me. I'll double check it in a sec.
To help speed up the tech support process...What compression, if any, is being used for the ISO? Did you rip it using my guide in the readme.html?
If you're using ZNX compression, I suggest re-ripping the game to .Z using the guide.
Not sure why it would work in 0.6 and not this version. If it has to do with the emulator and not human error, it has to do with the timings. I optimized the PSX timings heavily to run on the GP2X. This made compatibility go somewhat down. For the GP2X, it was worth the performance increase to lower the compatibility of a handful of the huge PSX library. I have Einhander, so I'll retest it and make sure it gets working. Diablo might be trickier to get working since I don't own the game.
I'll look into getting ZPSX working on other Zaurus distro's. Good suggestions dan.