Yes. The boot disc for DreamPi works. No problem at all. Love it. Tonight I was able to install PSO on my son's laptop win10 and logged onto the Sylverant server and played with him using my DC and Dreampi. Still don't know why I cant get it to work on my PC but I'll get to it later.
Do you have some sort of firewall running on your Windows 7 machine? Perhaps something like that is blocking it?
If you want me to look at the stuff on the server end, PM me the serial, access key, guild card number, and your Sylverant username, and I'll take a look at the stuff in the database to see if there's something on this end that might be causing the issue... Unfortunately, the server logs don't tell me anything in your case, other than that you did manage to initiate a connection to the login server, but there's nothing about why it was terminated in the log...