That sounds almost exactly like how I've managed to kill three (count 'em) A500 floppy drives. I'm not sure what happens, but I'm guessing that, in my case at least, physical degradation is actually ruining part of the floppy drive (read heads?). It made a very high-pitched screeching noise, right?
Replacing the drives has worked in each case for me.
I don't know much about any of this, so I'm sure someone else on the forum can elaborate.
