Hi Ibrahim,
For what it's worth, here is the order of the IFS statements in my CONFIG.SYS (just in case that's playing a havoc in your case):
DEVICE=G:\OS2\BOOT\UNICODE.SYS
IFS=G:\OS2\JFS.IFS /CACHE:262144 /LW:8,30,6 /AUTOCHECK:*
CALL=G:\OS2\CMD.EXE /Q /C G:\OS2\CACHEJFS.EXE /LW:8,30,6 /MINBUFFER:4000 /MAXBUFFER:21000 >NUL
IFS=G:\OS2\HPFS.IFS /CACHE:2048 /CRECL:64 /AUTOCHECK:*
IFS=G:\OS2\BOOT\CDFS.IFS /W /C:8 /M:32
rem IFS=G:\OS2\BOOT\UDF.IFS
REM ****************************************************
REM * FAT32 - the following three lines are DEFAULT ***
REM * installation parameters ***
REM ****************************************************
REM BASEDEV=LOOP.ADD
REM IFS=G:\OS2\BOOT\FAT32.IFS /cache:2048 /h /q /ac:* /LARGEFILES /FAT
REM CALL=G:\OS2\CACHEF32.EXE /f /p:2 /m:50000 /b:250 /d:5000
IFS=G:\OS2\BOOT\FAT32.IFS /CACHE:0 /H /LARGEFILES
rem CALL=G:\OS2\CACHEF32.EXE /F /M:50000 /B:250 /D:5000
PSD=ACPI.PSD
...
Note the non-default options for FAT32 driver in my setup, I shut off the cache processing (/CACHE:0) and do not run CACHEF32 at all. I found that this produced the better result on my system.
Keep in mind please that this is solely based on the fact that I'm only interested in pulling data off of a DSLR camera storage card, that's a very clean: "mount, copy and eject" process. If I had a larger storage device that I intended to do a lot more file operations on I would most likely keep the CACHE enabled.
Regarding your issue, how about just try with '/FAT' parameter only? I had actually removed this specification so that FAT32 driver figures out on-the-fly what it needs to support given the device that's connected. My DSLR cards are all FAT32. I also do NOT load the LOOP.ADD driver as I have no need for it. So while the initial install included it, for now I have it shut off (the less complexity, the better).