@elupus - another quick update. I managed to play a DVD ISO via UDF (browse into) that I created as ISO9660+UDF (2.50). I used imgburn to force UDF 2.50. I also created the same DVD ISO as ISO9660+UDF (1.02). UDF 1.02 is the most compatible version for DVD discs. And there our code (obviously) fails to read the IFO files.
So I think this is an issue of backwards (in)compatibility with UDF 1.02...