Well the most obvious way to fix this is to stop what you're doing immediately and switch to Wolf4SDL and use a much more friendly development environment like DevC++, Code::Blocks or even (dare I say it) MSVC. There are SOME differences (more macro code mostly and some other, somewhat complex stuff in addition to the obvious port to SDL and Win32 code) between the original DOS and the current SDL Code. You will be free of the 64KiByte memory limit, meaning you can do some seriously cool stuff like textured cielings/floors, 216 wall textures, directional sprites and a LOT of other stuff. Besides the massive number of wall textures, everything I just mentioned (plus some other stuff) already comes put in the Wolf4SDL code, all you have to do is un-comment some preprocessor definitions. Generally speaking, you'd be doing yourself and the community (by propagating the use of a much more functional and portable game) a big favor by using Wolf4SDL. You can do some of this stuff with DOS code, but you'd have to be extremely careful as your memory will quickly be eaten up, 64KiBytes isn't a terrible lot.
However, if you are dead set on using the DOS code, I don't know what to tell you if you're using Win7. DOSBox itself is just an emulator of DOS, so like most other emulations it is not perfect. There WILL be problems. Your first major problem is probably renaming your directory. Don't do that, leave it be. Secondly, BC++ has a mind numbing number of directories, probably more than DOSBox (which was primarily designed for DOS games based out of a single directory) was really designed to handle. So again I just really, really urge you to go with Wolf4SDL.