It sounds like you have a full install, so I"m not sure what's happening to you. I looked through Ambrosia's old support forum for PoG, and this issue came up a handful of times but never with a resolution.
A couple ideas that might help narrow the problem:
- Have you tried the mac_pog_demo from Macintosh Garden? As I recall, the pog.sit download is missing key things like the register program. You may need to download the demo, start the register program, and then run the game?
- Are you running on the startup disk or a different disk? Also make sure everything is copied out of the Unix drive if using the shared folder since that can cause issues. It would have to be copied onto the startup disk directly, not just the desktop, because items from the Unix drive can still appear on the desktop without actually moving into the virtual disk.
- adespoton's suggestion to install Internet Config may be worth a try as well, even though I'm not sure it helped coleblooded.
These are just some random thoughts. Maybe one of them will help? I'm a bit perplexed by this error message

. I've had no trouble with PoG running in Mac OS 8.5 and up via Sheepshaver, apart from difficulty getting the videos to display.