It looks like Dune is very sensitive with the ISO format; the file should be compliant otherwise you 'll get the "Playlist is empty" message.
I actually had some files created with PowerISO and they weren't compliant; my other players are playing these files (tvix and xtreamer) but dune is refusing to play them.
The workaround is to extract the files from the ISO file and create a new one that is compliant. Now Dune can play these iso files
The PowerISO settings of the image:
Filesystem: Joliet and UDF
ISO9660 filename: Standard
Joliet filename: Standard
Enable file optimization: disabled
I would recommend to use ImgBurn to produce ISO files because it checks whether is a DVD or not and performs the appropriate settings.
The settings for ImgBurn are:
Data Type: Mode1/2048
UDF Rev: 1.02
Hope this helps.