This is how I make ISO files. There might be a better way but this is the only way I know how and made many successful iso. the tools you'll need are :
1. isobuster
2.Sony CD/DVD Gen
3.iml2iso
There are many utilities found on
http://www.psxforum.com/utilities.php
You basically use the CD/DVD Gen tool to create your CD layout according to the original CD and export as and .iml file.
Then use iml2iso to create the iso.
ISOBUSTER is used to read the contents of the original CD to have the precise layout.
Cheers
There are also instructions on how to.. so read them....
hope this helps