In video guide on youtube I show how to install daemon tools for mounting iso files. You must out iso to win95 hdd with winimage app or similar.
Best is if you installed win95 on 2gb image and second hdd is again 2gb. This way you can hace 4gb. Put iso on first hdd and install on second. Because diablo2 full install has more then 2gb, you should split it
But best for diablo2 is exagear app