Holy crap! That's one of the original A1000 units with the boing ball before the commodore check! Clean it and the problem is in fact that floppy. You need a disk with kickstart that boots first and then as long as you softboot it will stay resident, then you can boot a WB or game disk.
Contact me in a private message with your info and I can mail you out the proper disks. I have an extra set of version 1.3 A1000 disks from way back that still work.