yep, did that. in fact thats the 1st place i went as I had deleted demul as an emulator. then added Sega Dreamcast as an associated Retroarch platform once i had downloaded the redream core.
like i said, it works just fine once launched via retroarch outside of LB.
I had this same issue launching mame roms via retroarch (Mame2014) last night, turned out that the retroarch.cfg file had some erroneous entries, once they were removed it worked. I noticed that my primary retroarch.cfg file does not reference redream at all.