Hi,
the reason is that SimpleSDAudio uses millis() in sd_l0.h for timeout and timing purposes. Unfortunately, timer0 is heavily used by the Arduino library for all kinds of Timings, like millis, delay etc., so it is a good idea not to figure with it. But: two interesting OCR-Outputs are only availible at this timer, that might be used even for 4-channel output with my lib even on ATmega328. On the other hand, timer2 is not as interesting, so I build a patch that moves all internal Arduino timing functions from timer0 to timer2. This patch can help you too. You find it already in the deepths of SimpleSDAudio library. Try it, if you got stuck ask again.