I had this problem with an older build of ePSXe. Try converting your image(ISO) to a .BIN. Beats me, but .ISO format images never ever worked for me on ePSXe. I recommend using ImgBurn Software to convert your iso or convert your disc into a .Bin, i just tested this on ePSXe 1.7.0 and i can confirm that .ISO still do not seem to work for me.
Also, when you do convert it to a .BIN it may take about 10-15 seconds before it starts to show anything.