Unfortunately my Loch Ness game is missing, so I can't test it -- even on XP. I played it on Windows 98.
If you tried playing in compatibility mode as opposed to installing in comaptibility mode by changing compatibility on the installer, be sure to try installing in compatibility mode. Also install by right-clicking the setup/install file and choosing "Run as Administrator." Install into some location other than C:\Program Files -- installing into your user's Documents folder might be best.
If the game actually contains 16-bit code, it's not going to work on a 64-bit operating system outside of something like VirtualPC or VMware.
According to the specs on the photo of the European version at ***Mobygames***
, it does not require video memory or a 3D graphics card so it should work fine inside VirtualPC with Windows 95, 98, ME, or the early version of XP (possibly also XP SP2 and XP SP3) installed. But since I can't find my game, I can't test it.