@:torturedutopian: try following code (change DH1:Path to your TinyLaunhcer Path)
assign >NIL: T: RAM:
assign >NIL: ENV: RAM:
IF EXISTS S:tl_startup
set >NIL: Reply `DH1:TINYLAUNCHER/TinyLauncher.exe`
IF $Reply not eq "5"
skip LOADTL BACK
A S:tl_startup file contain only
assign >NIL: TLGECS: DH1:GAMES/!ECS
because I'm using TLGECS: in some *.tl script for few games to change directory to it. I own real Amiga 1200 with 3.0 kickstart, 4 MB Ram Extension and Classic WB Lite installed. I got only error about CON: process when I executed set command without ">nil:". So are you sure you do not have something wrong in your startup-sequence file after executing Tiny Launcher? I'm not OS 3.9 expert because I never use it, but maybe it is something wrong with your system components. Try the same config and system installed under WinUAE to easyiest debug process than real Amiga. But maybe I'm wrong and someone other here can help you better in this case.