I hope Deflemask gets a legit .SID export eventually. The whole point of this format and ones like it is that they are not limited to emulation for playback. The .VGM spec doesn't include commodore sounds either : http://www.smspower.org/uploads/Music/vgmspec161.txt
The SID works perfectly!, I will be very happy if someone could record this awesome tune in a real C64!
PS: It won't loop due to the lack of a loop command in the DMF. Remember that the "repeat" flag in DefleMask Tracker is only for playback INSIDE the tracker, to actual loop the output you SHOULD USE THE GOTO EFFECTS (a B00 effect will do the job).
So, Warlord, it don't "broke" at 1:40, simply starts to end. Or maybe you are using a poor SID player (ReSid here).