Runs with sound and high resolution!
It may show an error about low RAM when you run it (Just press a key to skip it), however in-game the program runs smoothly and perfectly.
By default, DOSbox allocates only 16 MB of RAM, which is a bit too little for Blood. To avoid seeing the message informing you of such condition, open your dosbox.conf configuration file, find section [dosbox] and alter the value named memsize to be at least 38.
Furthermore, here is what seems to be optimal setting for Blood:
memsize=64 (see above)
core=dynamic (anything else makes the game crawl, even on powerful machines)
scaler=none (since you would want to set the high resolution in-game)
output=overlay (or surface, using opengl makes the game unreasonably fuzzy and hard-to-read)