In few words
If the image was correctly done you can install Alchool 120% in the guest system (in the virtualized Windows XP) and mount your image from there.
If it doesn't work (and it is a working image), then we have to deduce that the hardware emulation layer introduced by the virtualization is not accurate enough to deal with Alchool 120% and the "special sectors"...(with a pun: Alcohol 120% run less then 100%).
Some words more
If your virtualized environment doesn't allow to mount that format natively,
you may try more way to convert the image in a more common format, e.g. an ISO. (The OP tried with no success).
You need to put particularly attention doing a byte for byte copy and not a simple copy of the data.
It may be needed to copy even the read only sectors and to check if there were sectors of different (special) sizes...
How to check if your Image was correctly done
To check if your image was correctly done
If you have another computer with Windows Xp not virtualized, try to install there the image via Alchool 120%.
If you do not have another computer with Windows Xp you may install also Alchool 120% and mount the image in
- a Windows Xp system created on a USB pendrive
- a Windows Xp starting disk that install the system on a ramdisk
- a little partition where you install Windows Xp
If with one of the previous solutions the image works, it means that the image was correctly done and you can start to search for other program/options in order to convert it in a format that VirtualBox can mount.