Going to bump this old thread because I feel like I have the solution, or at least something that might be causing problems for everyone else. Also this thread comes up as a top result when I google the problem.
I was using the script on a network share, and this was the issue. When I moved it to a network DRIVE the windows machine/Powershell saw the script and relative paths as normal. It was probably something as fragile as an illegal character issue breaking the script and causing it to not see the folder structure. So:
1. exoDOS folders on local or network drives only, no shares with IP addresses, just D, E, F, etc drives.
2. powershell as admin
This seems to solve the issue.