You're probably using Win2000, that's what it does for me.
It's not a problem from Daemon Tools or Alcohol, because when I mount another disc while chanka is running, it recognizes there's a change, but won't recognize the disc as a DC disc.
Just win2000 not being compatible (I can run Ikaruga though, which I couldn't understand...) I'll just wait for the next release (anyway, my CPU is only at 1.4GHz so it'll probably run slow anyway! Ikaruga run at about 24/60 on my computer... I guess I could try the different options of chanka to improve that...)