A couple of years ago I found a nifty program on the net called FAKECD. I used it to overcame the problems I was having with an ageing – and damned slow – CD drive. It was however a MS Dos program and I seem to have lost it. The is a chance some enthusiast guy has made a similar program for windows useage. Check the net – you might get lucky.
Yes, I suppose an emulated CD-drive would technically make the game run fully off the HD. The only catch is that you'll need working CDs to make images of. And, naturally, a utility to make the image with.