Encrypted disk images as source
 

When I try to copy directly from an encrypted disk image, SD allows me to select the .dmg file as the source to copy from and then proceeds to either hang or crash during "Copy Files" without ever asking me for a password for the disk image.

If I mount the encrypted disk image and then use the mounted volume as the source for SD then everything works fine.

Not sure if this is expected behavior or a bug report/feature request ;-)

It's a known issue: we don't prompt for the password (and the OS does, but without popping up a dialog).