I have a similar problem with Cloanto 3.X ROMs. I have an Apollo 1230 fitted. I have found that disabling the Fast RAM on the 1230 (either by setting the jumper or by removing the SIMMs) then the floppy drive problem goes away. So with 3.X ROMs, you can have Fast RAM, or a working floppy drive, but not both.
Definitely a 3.X ROM issue. It's all fine if I go back to 3.1 ROMs.
