The same thing happened to me yesterday. That really sucked. After all the progress I made. And after that this stupid NPC to go to sleep didn’t pop up. Really frustrating…
To 1.
Compressing the ISO to CSO is not advised, because you get negative digits.
To 2.
Yes, 2.65 GB is the right size, because the data of Disc 1 and 2 are being merged, and the translation files are being copied.
Thought so, the patcher has problems on WIN XP, good thing you had W7 at hand :).
When you have problems with the cutscenes, be sure to use the newest PPSSPP version.
That should be it for error prevention.
Just update to the newest CFW, should be PRO-10B woth fix 3,
people reported it is working with it.
Do people still need the installer?
I could also upload it to MEGA.
Exactly that way :P, and if you need help, just fly over by the official forums of PPSSPP, I think they can help you out if you got problems with running it.