my advice, and it may seem drastic , is to use modmii to update your system to 4.2 and install recommended cios'. I believe cfg usbloader can load backups, but I am not sure since I gave up burnin games with the dreamcast.
mine freezes in the same spot. been trying stuff all day, its driving me nuts.
edit
I use fat32. I added a ntfs partition and run the game from there with no problems so far.
last time i was checkin out uloader i coulda swore it came with an english readme. i thought it said uloader creates a virtual nand an installs the wads for u.
modding ur wii is a personal thing.read as much as u can here, then decide what u actually want.you can also read here all the things people do that u shouldnt do.and also how to give urself some protection.then mod it urself .