'I really think the DGM will fail if run on OS/2.'
It would. That's no doubt about that whatsoever. Which is why my specific method there.
'A compressed raw format disk writer and an OS/2 disc image would work prefectly. 'Playing' the game would write the image to disc, so it could installed on the OS/2 system.'
Downloading and 'installing' the game would consist of downloading an image of the GC/2 disc and a raw-mode disc writing program. When you 'play' the game, it writed the disc image onto a CD-R in whatever format(s) OS/2 reads (which I'd assume includes the ISO standard, but might not), resulting in a prefect duplicate of the original GC/2 disc to be installed on the OS/2 sssystem.