FF7 freeze/black screen

Ok so I was at the point where you have to fight alone in the battle section at the gold saucer (after you ask dio for the keystone). When the fight starts, it just freezes or stays black, while the music keeps playing; it depends on the plugin. On the soft plugin, it goes black. On Pete's D3D, it just freezes. This always happens and there's no way to go on, I have tried changing the setting many ways. Is there a plugin that works here, or do I just have the wrong settings? Could someone tell me what the correct settings/plugin is for this part?

BTW, I was using v1.6, then tried 1.5.2 as someone suggested to me, but it does the same thing.

One more thing, this is the error:

Error reading CD: 4,40,24

does this mean I have a bad disk?