Are you using the same version of Soundhack on both systems? I always had mediocre support for use of MP3 in OS 8-9 generally. If I had to guess, I'd say the most versions have support for RIFF-based and mostly much older formats, and that Tom added MP3 import only on a much later because by 1999 or so, so many of his students were trying to use those files. Maybe around the time of the CarbonLib version? But if CarbonLib itself was the issue, the app simply wouldn't run.
I don't remember what I would have tried using for this in 8.6, which I did a lot of work in. Looking through some old 1999-2001 CDs of old projects today I see that I did convert some MP3s I found, and even (ack) real audio files. Maybe SoundApp PPC or Amadeus?