Show your CONFIG.SYS and AUTOEXEC.BAT...

It's nothing special, mostly default stuff. I didn't configure the system yet to optimize memory or anything.
Here is the autoexec.bat:

And here is the config.sys:

As you can see in the picture, I commented out the SB16 stuff to test if using UNISOUND again would work, but CTCM still keeps getting loaded on boot. No idea how.
Sorry in advance if the quality of the images isn't good enough. I'm working on getting some device to get video image from old PCs directly.

Seems OK...
What's the output from UNISOUND ?
Also, press F8 during boot-up to run it step-by-step - this should reveal where the CTCM gets loaded...

Pressing F8 during boot-up only allows me to run a step-by-step of the config.sys file and the option to skip autoexec.bat entirely. Here is what UNISOUND gave me when I skipped the autoexec.

When I tried it with SB16 drivers loaded it just takes the weird values from official SB16 driver.

Also I got a new issue when trying to run Prince of Persia with only UNISOUND loaded. The screen went black and pc stopped responding, but intro music kept playing through the speakers. I'm thinking of abandoning this installation and doing it all over again, without Windows this time.

Strange, F8 should allow to step-by-step through the AUTOEXEC.BAT as well...

BTW, is there anything unusual in that machine? Like a SCSI controller, or a NIC ?

Maybe it doesn't allow it because it isn't MS-DOS. I installed PC-DOS to see how compatible it would be and just to see what are the differences.
Nope, everything is integrated into the motherboard and it even has plug and play bios, which I don't think was standard in a 486 class machine. There is only one weird card which is a 2000 year clock fix card or something like that. It has its own screen every time the PC is booting but I doubt that it's the reason for my problems; it worked before with the card installed.

Just tried it with PC DOS 7.0 Revision 1 a.k.a. PC DOS 2000 - works fine!

"Process AUTOEXEC.BAT [Y,N]?" - press Y
and then it asks about each of the commands...

I got PC-DOS 6.0. I'll just do a fresh install of the newer version, try again and I will let you know.

Here I am again after 3 days. On the 19th I did a fresh install of PC-DOS 7.0, got UNISOUND and some games on the system, and it was not working; the system was hanging just like before. It was late, though, so I decided to try it again the next day. On the 20th it still wasn't working, and I spent some time trying to configure it, and I spent like an hour trying to get a CF-IDE adapter mounted to a bracket so I could copy over the files without opening the IBM. When I was about to give up with the sound card stuff, it finally worked. No idea what made it work, but I'm not complaining.
And here I am on the 21st, just booted up the PC, and everything is working how it should.