HDToolbox likes to save a copy of the drive information to the SYS: partition (boot floppy in this case). I have put it in RAM: in the past to get past this. Bummer about your disk. Hopefully you can find a new one.
BTW, you shouldn't need to low level format the disk. Just create the read drive info, create partitions (make sure one is bootable), save the changes and quick format.
