i added two pictures, which may help a bit.
first extract the powercopy-game files to you harddrive. for each disk you have a folder with the track files (game/disk-1 // game/disk-2 ... )
within powercopy you select "DEVICE" and choose what i framed in RED. source is DEV and target "DF0" .
then press "DEV PATH" and choose the folder for the first disk "game/disk-1".
if done, press ACCEPT.
on main screen push START
if you have a second or third disc you have to repeat first steps and choose "DEV PATH" the second or third folder.
i have no clue about special setting, but this is basicaly, how to write back those files.
Edit: ohhhh. wwarp, not powercopy - well, i'll leave the things above, for later usage
Edit2: i found the Retroplay upload ( zone: Ghosts'n'Goblins.zip ), and it has the powercopy files in the archive (GNGdsk.zip)
so extract GNGdsk.zip on your HDD and choose within Powercopy "DEV Path" the folder "GNGdsk"