On my IOmega 250 IDE ZIP drive (which I also have problems with), I used the ZIP entry from the OS3.9 disk (located in storage/dosdrivers). This uses fastfilesystem.
When I run IOtools with a disk in the drive it freezes IOtools. What an arse.
Check your jumper settings again though. IIRC to set to eithermaster/slave with a second device you need 2 jumpers set. I believe if you have only 1 jumper it sets it to the only device on the bus. This took me a few hours of wondering why the hell it wasn't working right :-)
Also, the unit numbers and automount need to be set in the tooltypes (as well as/instead of - not sure which) the text file if you have installed magicworkbench.
