Uberjack posted this news:

In an earlier post, I noted that extended DSK support in the latest version of Fuse PSP does not function correctly. After some testing, it looks like extended DSK’s do work, but only outside ZIP archives - I tested this by loading Robocop 2, and it works fine. Extended DSK support is provided by libdsk, which does not support loading from binary data, and which will be replaced in a future release of Fuse.

Until the next version of Fuse comes along, please keep extended DSK files decompressed if you wish to use them with Fuse PSP. Note that not all DSK files use the extended format, though there’s no easy way to tell the difference between the standard and extended formats without examining the file’s header.

http://0xff.akop.org/2008/08/27/fuse-psp-correction/