I think that once I'm back from work, I'll try this and post my results. The only issue I can see would be that BootDreams would want the 1st_read.bin to actually be called that...
EDIT: Wow don't know why I would've thought that. I didn't think it would let me manually choose a binary. Shows how often I have a problem/rename a binary :p
EDIT AGAIN: Wow, that actually worked! Very interesting. Who would know that if the 1st_read.bin was too far into the file system that the Dreamcast would just stop looking for it? I guess that's a fix on record for selfbooting KOF 95.