I found the source of the problem!!! I still don't understand why, though. It turns out it's one of the CF cards!
After finding some time to play with the MS-DOS 5.0 and MS-DOS 6.0 floppy boot disks, I found that they both worked correctly and loaded the MTMCDAI driver flawlessly. So, it's not an OS problem.
I realize I had my first 4GB CF with Compaq DOS 5.0 as the master disk... When swapping in for my other 4GB CF that I used to set up MS-DOS 6.0 and/or Win95, the driver would not load! They are both 4GB and physically identical (same generic blue stickers)... BUT, one has slightly more space (aka sectors) than the other.
I made 10000% sure the "faulty" one was empty by deleting all partitions and even tried "size adjustment" option of SdFormater... Couldn't load MTMCDAI. I Tried cloning the "good one" onto the "not so good one", still couldn't load MTMCDAI!!
I can't believe that just a slight difference is size totally breaks ATAPI/IDE of the slave drive.
Athlon64 3200+, HD3650, SB Audigy 2ZS
P4 1.8Ghz, V3, SBLive
P3 866Mhz, Riva TNT2, SB Audigy
P2 266Mhz, RageIIc, V2, SBLive
P233 MMX, Mystique 220, SB 32
P100, S3 Virge GX, AWE64, WavetablePi & PicoGus
Prolinea 4/50, ET4000, SB 16, WavetablePi