I'm using KH2 and it's the NTSC-U version and not the Greatest Hits. After it rips the .pss files, I started up PSS_Demux and I dragged the individual files, not the folder. I could try it with my re:Chain of Memories disc and reply back.
EDIT:
re:CoM worked, I think it might have been a bad rip? I'll try to get my disc back from my friend. And thank you so much for this!