dodgy drive

ive never heard of such a problem, so you're situation is unusual. have you tried inserting different disks?start by opening up the 808 and checking the connections are all tight.

also check that the 'jumper' (on the back of the zipdrive) didn't come loose in transit. this sets the zipdrive to 'master or slave', you want master.
i'd be surprised if these ideas solve your problem, but at least its a start point.
if you do need a new zip, 100mb drives should be pretty cheap, but bite the bullet and go the 250.
it will run on the old os and installation is easy.
i'm sorry your 808 isn't giving you instant pleasure, don't give up.