Maybe the drive itself is dead. Do you have any other 400k internal drives you can swap in?I have lubricated and cleaned it (though perhaps not as well as I should?) the heads are clean. Sony Test shows the stepper as correctly working. I wrote this disc on the machine itself and it verified OK. The machine boots fine from other floppy drives using this 2.0 image.
I have the same problem on macintosh ED without floppy drive)