I posted this on Zophar's forum but it seems to be dead...
The trick is to save your game to the SRM then load the file into zsnes and make a save state after you have loaded the game from SRM in ZSNES then save the state and use Dragon Warrior save state editor by Casmaster and choose file open DW3 then choose file then open ZSNES and pick the state you saved. Make sure that you do not alter the "Gold in" or else it wont work.
restart ZSNES pick the state and load it and go save your game at a king or other person who will write to SRM. Then transfer your SRM file back onto the PSP and then load up your game from the SRM.
It should all work as long as you removed the "Gold in". If you do not blank out gold in you will find that your save games on SRM are lost.
You can alter stats as well as items.