Hey Arrowhawk. Do you have the latest version of the BASS.DLL in the root of your UAF (DC) directory? I know that this file is required to play music formats such as Mp3, and the like. Here is the link to the download :
http://uaf.sourceforge.net/bin/Bass.zip
Install that in the root of your DungeonCraft directory and see if that helps (you will need to restart either the editor or engine). Hopefully that will help.