Sorry for the delay in replying. I've now been able to set up Soundshaper Lite on a Windows 64-bit machine, and have had no problems with drag+drop.
I suspect the error message may be a default one which is really saying: "I don't know where your TEMP folder is".
Please check Options | Settings and check that you have designated a folder as the TEMP and that this folder actually exists. I would recommend having TEMP as a subfolder of CDPR7, not of SoundshaperLite, though I can't see that it would make any difference where it is, as long as there are no gaps in the Path.
I've also installed Lite on my 64-bit Win8.1 laptop, and again, there have been no problems with drag+drop.