Strange, it worked fine on my old 68040 (also an apollo card), the 060 shouldn't be that much different (save superscalar execution and some additional mmu hacks that can speed up chip ram access).
I would suggest you try using WHDLoad. In case you aren't familiar, this is a system that allows many games that were originally floppy-only to be installed to a hard disk, but includes installers and fixes for many games that could be installed, AB3D included, if I am not mistaken. IIRC, it patches the game too, so that you can cleanly exit back to workbench when you are finished playing.
You can obtain WHDLoad here:
http://www.whdload.de/. You should be able to find an installer for the game there.
-edit-
WHDload Installer for AB3D here:
http://www.whdload.de/games/AlienBreed3D.html
