@xrcxj
HDToolBox 3.0 is just too old to mess with. Do not even try it. You are going to have to get OS 3.5+ installed first (or get some custom boot disk that patches the FFS and scsi.device to get the drive recognized). Once the new drive is partitioned properly you can then install OS 3.9 on it (or 3.1 if you like)
There is no easy shortcut around this! The issue is in 1993 there were no 40GB IDE drives around and the HDToolbox program does not recognize the newer drives. Bottom line.
(In one case I was able to get HDToolBox 3.1 to give me 4GB on a 20GB Seagate IDE drive. I was able to install 3.1 on it, then 3.9, but I decided to do the above to actually get the full 20GB.)