Question: Sim ver 2.20 for c3x. Trying to simulate code that runs on c32. Coming to instruction that is c32 specific.

Answer: LDI of a register (i.e. R0, R1 ,R2, etc...) into the IF is not allowed.
However as a work around there are several possibilities:
1) and all 0's into the IF then and the register into the IF.
2) push the Register onto the stack, then pop it into the IF.
3) use direct addressing for the LDI instruction