pSX natively supports CDZ. It is the best PSX emulator. W@W!!! I wonder why we uploaded CDZ, aside from a zipped CDZ being far smaller than a zipped ISO ... Pro tip ? it also comes with a tool to handle converting to and from CDZ.
As for the scratches on the CD ... no shit. The CD broke into seven pieces and I put it back together with super glue. You're lucky the rest of the tracks sound as good as they do. No one volunteered to import, rip and upload a version that was not fucked up, so that's what you get.