I've got the same problem with mine. Just discovered it today. I have a harddrive, and my system boots fine, but no floppies work. Tried formatting... It gives an error about cylinder 0. It won't boot off of the floppy drive either. All these disks are fine, I tried them in my other miggy and no problem. I took everything apart and it looks like the head is searching for whatever track is on the outside of the disk. It doesn't move much, but the head is moving. I tried reseating the cables too... I just figured my drive has gone out. I guess it could be dirty, but I've used a head cleaner too. It worked before, then I put it up for a while. Now it doesn't.
I'd like to know what to try next also.
Thanks guys!