I ran into a similar problem. The program specifically needs "lame_enc.dll" in the "Shared" folder in Winamp. This file was not included in my Shoutcast 2.3.5 install. Instead, it has "enc_lame.dll", which doesn't work.
You can grab it here. Make sure to extract it to C:\Program Files (x86)\Winamp\Shared. You can delete the README if you'd like.
https://www.dll-files.com/lame_enc.dll.html