Dobbs, I may have a solution for you. Personally I could never connect to schthack unless I used the dns server tool on my computer to redirect the dc's connection to schthacks dns.
First, download and unpack this program and start it on your pc: http://dreamcast-talk.com/uploads/dnsserver.rar
Edit the text file that it comes with and change the old ips in there to schthacks new ones if its out dated. (it should be up to date).
Second, make your PC have a static IP address. Not sure if you are familiar on how to do this. If you're not go here: http://portforward.com/networking/staticip.htm
choose your OS and follow the directions.
After you obtain your static IP go into you pso and change the DNS to your computers static IP.
Make sure you have the dns program running on your pc (it can run in the background, in the task bar when minimized) and then try to connect through pso. And it should work.
I'm not 100% sure if this is your problem but it sounds like the same symptoms I was having.
Lastly if you dont want to use utopia you can try the action replay CDX demo http://dreamcast-talk.com/uploads/Cdxdemo.rar
It serves as a perfect boot disc. Doesnt seem to be as hard on the gd-rom too. + It doesnt have the problems that utopia has with pso. I believe there are some item seeing problems when using utopia on pso.