Have you installed the
patch? Check the version number in the bottom right corner of the main menu.
Try switching your game resolution to 640x480, then load the game, blow up the forge, hopefully get to act 2, and save once the cutscene is over (then restore your original game resolution).
There was a Windows 98 crash problem on act change in the original English release (v1.3) which was fixed in patch 1.45 or later, which could be avoided by setting the game resolution to 640x480.
A couple people also had crashes on act change due to corrupt items in their inventory, which could be avoided be dropping those items. Try going through your inventory and get rid of anything that looks strange. The bone spear rings you can sometimes find in the battlefields should not cause a problem, but that is the type of thing to look out for. IIRC one person had a gem or something that acted like a container.
No quest items carry over between acts, so if you can not use or sell something, feel free to drop it. Holy water you should keep, but keys, iron bars, alchemy knives, non-plant alchemy material, etc you can get rid of.
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