Just some quick thoughts
1. Never, never, NEVER terminate anywhere except the end(s) of the chain.
2. Can't remember from post, but is the chain terminated at *both* ends - the CS does not provide termination on itself, you must use a terminator at both ends. (er, yes it is)
3. You *are* using active terminators, aren't you? Ever since Fast-SCSI2, the standard (strictly speaking) requires active terminators. Check that yours *are* active.
4. The 1.5m max SCSI bus includes the device interfaces... a 1.5m cable plus devices exceeds this length, not by much, but it can be critical.
5. A low-level format, if it is offered in the SCSI controller BIOS, can map out bad sectors. Most drives (ie manufactured in the last 10 years) carry "spare" tracks, and remap bad sectors to the spare areas. (I remember someone "discovering" this, and created a utillity which made the spare area available.. 'double your drive capacity for free', I seem to remember. Not a good idea!)
6. Remove the Term Power jumper, and test. Check that the drive is not terminated (it shouldn't be, but check). If this still causes issues, remove the SE jumper. Also, many drivs carry two sets of jumpers for setting ID, term, etc. Check for the existence of a second set (underside and/or opposite end), and ensure term, term power, and ID match the other set.
Drive manual (if you dont have it) can be found here
http://www.maxtor.com/_files/maxtor/en_us/documentation/manuals/atlas_10k_ii_product_manual.pdf7. Don't use HDToolbox, it's crap.... use anything but!
It could well be the drive, but all troubleshooting should be done from the "wire up". If you have access to a PC with SCSI controller (such as an Adaptec 2940UW or 2940U2/U2W, 29160), check the drive on that. There are also *much* better diag software available under PC OS, which might help narrow it down, such as the excellent Seagate Seatools, and some Maxtor stuff. These can also display SMART error logs, (dis)enable SMART, drive analysis, and so on. If you get really stuck - and are in UK - post it to me and I can check it.
Thinking about HDToolbox, check the maxtrans and DMA mask settings. something like 0x7777777 (? - more knowledgeable peeps can advise on that). Hmm, and something I've never played with, given the vast amount of time since I last played with an Amiga... the partiton size.... presumably you are booting from the IDE drive, not the SCSI? If it is the later, then is there not an issue with partition sizes under the standard Commodore filing systems?