As far as I know,if you don't have a newer softmod...playing this off the hard drive is not happening yet. Also the only way that you can back this up is to disk so far FWIH.
punqewe is right I dont think theres a fix out yet. I finaly got tired of waiting and uninstalled my old Softmod and installed NKPatcher(Krazies installer) and it worked. For more information go to the link below which you would have found if your just searched. http://forums.afterdawn.com/thread_view.cfm/237374