winme is hideously unstable
i work in a tech support callcentre, the amount of random problems we get with winme is so bad we pretty much tell people to either go back to win98se or jump up to win2k or winxp

make sure if you use win2k or winxp that you get the correct alycat version for 2k/xp as opposed to the win9x version.

see if you can get another old pc with an isa slot and try it, try different combinations of pc hardware with transponder hardware, or even versions of alycat, and see how you go, that way you can at least narrow down what might be causing the problem (ie if it all works fine on another pc with the same transponder/isa card then it's something with the ISA interface or pc itself)

you can also get problems with memory interupts on isa slots, because they have to be manually assigned most of the time
make sure you havnt installed a sounddcard or soemthign else that uses the same IRQ settings.