Problems with your machine in general.
There is 2 kind of people: one thinking about moving to Mars after here becomes too bad, the others thinking about how to keep this planet habitable.
Ladies and gentleman, these are words of wisdom and experience. Exxos was 100% right here.
Maybe you know that the CT2 uses separate IDEIOR/W signals (you literally have to intercept them before going to the hard disk). For some time I had been using my IDE disk the classic way, i.e. just connected to the main board without any interception. The main reason was waiting for the damn SD adaptor while I had everything else (IDE splitter etc) ready so I put that aside and connected the disk with a simple cable.
And yes, it was working well. I didn't have a reason to suspect anything fishy except one strange thing - Lotus III, which I got working, wouldn't always work. I disable the cache, see the intro picture and in 2 of 3 tries failed to load. Couldn't really pinpoint it, sometimes it was ST-Low which needed to be set, sometimes clean boot, sometimes HD Driver's caches lowered - all but deterministic. Everything else was fine so there was no reason to suspect the disk.
Now, when I finally got the SD adaptor, I removed the simple cable + old IDE disk and short circuited the new one. In panic (nothing works!) I removed the 'accelerated' IDE splitter, SD adaptor, SD card and the PSU. And you can guess the rest -- I didn't put the old splitter back and reverted to using the simple cable. Curiously, still using the SD adaptor+card, as I was checking whether they still work etc. And bam, there we go, of course the SD card was much more sensitive to this faster IDE accesses and that was the reason why read was failing. Reinstalling the accelerated IDEIOR/W fixed everything back to normal.
In the end, a rather stupid issue and I'm sure I'd notice earlier if the short circuit hadn't happened but... lesson learned.