It's been a while, but yes, firmware versions and software versions are linked pretty closely with most of the recent Kenwood stuff. The error you are getting is what I recall getting when trying to talk to newer firmware radios with older software.
I have the wideband license for my KPG-95, so I've never had a need to try and roll back firmware on a radio. I do believe you need to be very careful with the firmware and the version of radio you have. There is a reason there is different version radios, and trying to cram older firmware into a newer radio may not go the way you want.
Easiest solution to all this is to bite the bullet and get the wideband license for your KPG software. That was the intent of Kenwood, and while there may be hacks to get around it, those of us who use these radios for what they were intended don't have a need to try and do it any other way.
As I mentioned in my post, I run this exact combination of hardware and firmware on wideband and using 7.01. Going to DGN gets rid of features, and in some cases, Kenwood recommends older software (such as TFS on the x180s).
Does the radio still think it has a KCH-16? Have you written it to tell it that it has a KCH-15? Why are you "reading configuration" after manually specifying it in Product Information? That is redundant.
If you manually specify the options, then write the radio, you may get an error, especially since if the file in the radio thinks it has a different head. You'll also get the error if written with newer software.
These radios are very hard to brick compared to a Motorola. If it were me, I'd save the known working file I had made using 95DGN, and make a new file in 95DG and dump it in the radio, overwriting the existing info in the radio. There's no tuning data saved in the file, it's only frequency info. If you try to read a radio written in DGN with DG, it won't work. If you just create a new file in DG for a radio, the radio will work just fine.