Hey Guys maybe you can help me out here. My first time trying to install a mod on a game, I downloaded the GrayFace MM7 Patch and replaced the contents of it onto the folder; however, after doing so I am getting a message to insert the 2nd disc. I'm sure I am making 100 mistakes but, I would thank you guys for helping me out!
Congrats on entering the modding world! It can be frustrating but oh so rewarding :)
I decided to try and recreate your issue by installing the Grayface MM7 "patch for the English version of the game" on a freshly downloaded copy of MM7 off of galaxy. I noted it defaulted to the wrong folder, but that's easily fixed. I made sure all the extra options were on (Though I'd personally turn of the mega dragon one for an actual play through)
I didn't run into your issue, but a couple possible hangup points presented themselves. There was also another topic where people were getting similar issues. https://www.gog.com/forum/might_and_magic_series/cant_install_might_and_magic_vii
So with that, I'd personally check a few things:
Has the right version of the MM7 patch been downloaded and run?
Has my antivirus decided to quarantine a file like what happened in that other posted topic? (I always like to exclude my game directories from my Antivirus personally as I've run into multiple issues including it deleting saved games)
Have I ran "MM7Setup.Exe" and made sure "Hardware Accelerated 3D" and "DirectSound 3D Software Emulation" are chosen.
Once you do get it up and running you may want to try Mouse Look mode (Toggles with Capslock) by editing the mm7.ini and setting "Mouselook=1" and "AlwaysStrafe=1" for a more modern game play style :)