I suppose it won't matter if you use the JK_.cd file or not?
I presume this is the real retail game and not some copy or hacked exe...
You might try installing DaemonTools and mounting the image. Though if it's not recognizing it as a valid win32 application that sounds like a more specific software error. If you can't find the answer by searching our forums, I'd suggest contacting LucasArts about it (see their technical support pages). They will support this game, since they're still selling it.