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GK3 "please insert CD 1" issue NOT solved. I just bought the game. I am running Windows 7 on a desktop computer WITH a CD/DVD drive built in. The drive works fine.

I also have installed the Virtual Drive software.

Nothing is allowing me to get past the "Please insert CD 1" message. I already have the game settings set to administrator and Windows XP compatibility. I also made sure the game is installed properly in a GOG location (not the Games folder).

Is there a way to get this stupid game to actually play, or did I just throw my money away?
Have you tried booting the game with a disc in the drive? Sometimes it helps, any disc should do the trick.

If you use any virtual drive software, such as Daemon Tools, try disabling it when running the game, it is only useful for these older games when computers don't have physical drives, which yours has.

Also, try tinkering with compatibility mode, use different configurations and combinations with the options they give you, is Windows XP the oldest you can go, in compatibility mode? If not, running in Win95/98 might help.

You say you created a GOG folder, but make sure that folder isn't under Program Files. Never install anything under Program Files, unless it's some Windows required program. I hope you didn't just copy and paste the game files to this new location, a full uninstall and installation is required.

If all else fails, contact GOG support, by submitting a trouble ticket to them, explaining your issues and detailing your personal computer specs -- their support team is awesome and they're likely to help you with this and any other problem you may get with their games. If they can't help you, well, then there's always the 30 day money back guarantee, which is valid if you can't get a game to run even after contacting GOG support.
I tried all suggestions that I found in the other posts for this game--for me nothing was working. I contacted GOG support. They sent me a link for part of file to replace in my GK3 folder. After I replaced that new file, the game now starts and runs. Thanks!
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bisbane: I tried all suggestions that I found in the other posts for this game--for me nothing was working. I contacted GOG support. They sent me a link for part of file to replace in my GK3 folder. After I replaced that new file, the game now starts and runs. Thanks!
This is the link and explanation by the way, might as well have added that to help others with similar problems:

A link to download a new .exe file to replace the existing one:

http://files.gog.com/support/GK3.zip
Just an update, because I can see that lots of people still have the same problem ("Insert CD1" error on GoG edition for Gabriel Knight 3) which I just managed to resolve on my PC after several fails. So for those of you who still struggle, you need to do two things:

STEP 1:
Download GoG patch ("GK3" file and replace the GK3 file you have in your game folder. Now, the GoG link mentioned in previous posts does not work, because apparently it was not updated to the new protocol (it should be httpS instead of http).

STEP 2:
Now when you have downloaded new GK3 file and replace it in your game folder, just download free version of DAEMON Tools Lite and create a virtual CD drive with it.

For my PC, I had to do BOTH to fix this issue with the game. When you do those 2 steps, Gabriel Knight 3 should work. Unfortunately, you need to create a virtual CD drive each time you turn on your computer, because it disappears each time you restart your PC (or maybe it can be resolved by changing some settings in Daemon Lite, maybe someone can elaborate on that as I don't have any experience with this software).