Strange... my computer is worse than yours. Here's what I did:
My PDS entry in games.dat was the Japanese entry (titled "Azel", copied and called "Panzer Dragoon Saga (US/C).
I didn't use the Loader thing, but instead manually used gentoc to make a toc, altered base.ini, and ran gsaturn.exe -i . For some reason, when I used Loader it didn't detect the CD.
My cue file for the first disc was:
FILE "PDSAGA1.BIN" BINARY
TRACK 01 MODE1/2352
INDEX 01 00:00:00
TRACK 02 AUDIO
PREGAP 00:02:00
INDEX 01 60:59:23
TRACK 03 AUDIO
INDEX 00 61:07:60
INDEX 01 61:09:60
I can't post my .bin, obviously, because its so large.