I'm having this same problem except I'm not using an SD card at all and don't have one. It was working all fine until one day it just did that can't create directory thing. The cheats and updating have the same problem. The one who softmodded my wii wasn't me so I need baby steps :(
I like that games can be fixed after the fact, hate that it's being abused via beta tests... And DLC... I was a 7800 owner back in the day and loved Impossible Mission, turns out I couldn't beat it because it was actually impossible lol