if that demo runs ok, try copying the method's it is using to get your level loading, if it wont load using those techniques..then maybe..
Those pak file come in different formats, so does the data held inside of them, and Im pretty sure that GDK is pretty selective in what it will load.
Maybe the file you are using is the wrong format, or maybe it is corrupt ?
If you can get the GDK demo pak file to load in your code using it's techniques then it must be your level that is the problem.
Just to note, I think it is quake3 format files that GDK loads, although if you search the forums I believe someone wrote a tutorial on using Steam's Hammer editor with GDK and how to get a level from it into GDK.... might be some help if you can track the thread down.
If it ain't broke.... DONT FIX IT !!!