It's probably an alignment problem of the floppy disk drive...
I mean a kind of calibration difference between the drive in the DPX and the drive in the PC...
What happens if you write floppy disks on the DPX1 itself and then try to reload them in the DPX ? Can the DPX read its own disks ?
(you can do a "dump" of a previously loaded soundbank to a 3.5 floppy disk on the DPX - see DPX manual for more information)
And can DPXREAD read these disks written by the DPX1 ?
Instead of DPXREAD, DPXWRITE and DPXFORMAT you may also try OmniFlop.
If I remember well Jason has fixed the DPX support after some mail conversations I had with him, so OmniFlop should work fine with DPX disks. The files created by E2DPX can be written by both OmniFlop and DPXWRITE.
The floppy drivers you need to install for OmniFlop can live together with the FdRawCmd driver of DPXTOOLS on a Windows system, so that shouldn't be a concern...
Note: One of my DPX1 units also often shows the DE error. If that happens, I just keep trying the load button until the DPX succeeds in reading the disk. I think the floppy drive in my DPX1 is almost dead.
Time to replace it with the HxC SD Card unit