Your save works fine here, so it isn't an issue with the save itself. The only thing that happens when I get to the 'too heavy' messages is that the hero or DK can not move any more (as designed).
The version of the game shouldn't make a difference. I just mentioned that about Steam because I don't have that version installed (in addition to the original disk version, I have the most recent version from the Divinity Anthology and GOG, so didn't install the Steam version).
For now, leave a couple barrels or chests in the battlefield by the merchants to offload excess loot. You will be able to return to get stuff any time up until the end of the act.
You are actually not that far from getting the first summoning doll. Jump down the pit in the arena, and the doll is a reward for helping someone close to where you end up. The solution is on that level, though you'll have to clear the majority of it.
