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I used the Setup utility to make the game start in 640x480, but now after I get past the loading sequence Dosbox goes into windowed mode and crashes
This question / problem has been solved by phanboy4image
Does the game work at 320 x 240? Also, what are your system specs?
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bhlaab: I used the Setup utility to make the game start in 640x480, but now after I get past the loading sequence Dosbox goes into windowed mode and crashes

Try launching GOG's "Change Graphic Mode" utility in the start menu Blood folder and picking "overlay".