OS 10.3.6 works fine for me also. The only odd thing I noticed is with my external HDD. But apparently ext HDD's is one of its bugs. Up to you but you can do a search of 10.3.6 on the forum to see how it's affected a few people.
Apparently Internet Explorer has been known to have some dwnlding issues in OSX. Likewise the earlier versions of Safari had similar issues too.
As far as the file goes. If it happens again. Ignore the failed to mount. Go to the dmg file & drag & drop it onto Disk Copy. If that fails see
THIS thread OR
THAT thread.
Have you repaired your permissions for OSX recently?
Repairing Permissions link Oh Spearson, that's telling him. If I didn't say it once I ... lol