As a hack, you could try removing the DIR definition from direct.h (the Open Watcom file) and see how that affects things. (Probably best to save a backup copy of any files that you amend.)
I have no idea whether making that change will lead anywhere useful. My guess is that, even if it fixes the immediate problem, it will probably break something else sooner or later.
Are you committed to using Open Watcom ? It's a rather uncommon choice of compiler.