Yeah, I also have been unfortunate victim to the DISC READ ERROR. Only in Kowloon, though. Never heard any other disc having the problem scouring the internet. At first I assumed it was for being an import, but even PAL players were getting the same error. Usually i save a ton anyway, but one time it hit me on the next load screen after getting a Kids Dural Clear (!!!!!). It isn't too frequent, so I always forget about it haha.
Also, for me anyway, only happens when I let my Dreamcast sit idling too long after the codebreaker disc stops spinning once fully loaded into memory. If I'm effecient about swapping the boot disc out for Kowloon before idling or promply after the drive rests, it never occurs.