Seems the original poster didn't link his attachment correctly. Here's a working thumbnail link to his full image for those needing a closer look:
I found that removing "sml_" from the file name of the jpg linked to in the first post, you can view the full sized image. (I'm guessing the "sml_" is the naming convention that this forum uses for auto generated thumbnails on image attachments)
It's not using the expand in the same window/tab feature that this forum has since this is just standard IMG BBCode. It will be up for the original poster to fix it in his original post.
I suppose I could download it and reupload it to my own file attachment space, but I'm too lazy for that right now.
As for the issue at hand. I would guess the hard-drive swap wouldn't have made a difference. Not sure how the older power supplies worked, but the motherboard is probably on it's own 5v/12v rail. So a defective part on that rail would mean changes to the devices plugged into the molex connector may not have as big in impact on your issue since the PDS slot and anything else to do with the motherboard is on a separate rail then the molex connector for your hard-drive.
Unlike PCs, these old Macs used floppy drives with power provided by the motherboard. (as far as I'm aware anyway, I don't recall seeing a separate power cable last time I opened up my SE)
So you could run it with the floppy unplugged to see if it has an impact on your issue.
Then again, the age of the machine and the PSU means everything is probably on a single rail. Then I guess the PDS card was just pulling more current then your old hard-drive was so the swap made no difference.
But if it does have a separate rail, then perhaps your SCSI2SD actually compounded the problem if you had it powered from termination power instead of using the molex connector to power it. But you didn't say, so that may be irrelevant anyways.
Either way, it definitely needs a recap.