I'm just stating my point, Cory. Nothing more.
Now, as I remember the 520 was the first of the AIOs with the 13in monitor and is closer in design to the Color Classic which is more like an LC II than the Color Classic II which is more like an LC III. It and the series that followed was bought by many schools here in NYC, which I took care of for many years until they upgraded to OSX machines around 2002.
According to the install CDs I have from the school districts I worked for, the System for the 520 is System 7.5. I believe that the 520 may be able to run System 7(.1) but that remains to be seen and that is opinion and conjecture on my part based on my experiences with them long ago.
Using both the "Hacked version" of HD Setup, LIDO, Silverlinging or other Hard Drive utility would be beneficial in partitioning and formatting a Non-Apple Hard Drive on a Mac. But I have seen WD Hard drives in Macs as far back as the late 80s with the Mac Plus along with Quantums, Segates and many others but not all were formattable with the standard Apple HD Setup. In the least, he, the OP, should use something other than Apple's HD Setup.
Now, stating from my experience and what I have observed, if one has a drive that is larger than 2.0GB and are using System 7 and HSF format, there will be problems. Again, stating from my experience and what I have observed, partitioning the drive to 2.0GB or less have solved such problems of having a larger than 2.0GB partition. If he is using OS 8.1, then this is a non-issue and there should be no problems with using a partition larger than 2.0GB. The question is, what system is being used on this drive?
Lets supposed that there is a 2.0GB limit. Lets just suppose that. Now lets do some math...
2.0GB in decimal is 2,000MB or 2,000,000KB or 2,000,000,000B.
2.0GB in binary is 2,048MB or 2,097,152KB or 2,147,483,648B.
2.1GB in decimal is 2,100MB or 2,100,000KB or 2,100,000,000B.
2.1GB in binary is 2,176MB or 2,228,224KB or 2,281,701,376B.
The question lies in this part - Is 2,147,483,648B (2.0GB in binary bytes) referred too as 2.1GB decimal? Marketing use this would be a deception on manufacturer and seller in selling an item that is less than advertised. But I have seen this ploy done before.
Now if the drive is actually a 2.0GB drive where 2,147,483,648B is referred to as 2.1GB, then there should be no problem in partitioning and formatting this drive fully under System 7. Right?
Now lets take a step further. If the drive is formatted fully under System 7 (which I have done on hard drives and other storage media as large as 8GB), and there are problems trying to copy files or installing a system to it, then it needs to be partitioned to 2.0GB or 2048MB or smaller. This is my proposal to get things working as from what I know. If it formats fine and it copies files fine and installs a system without partitioning, then my information is useless.
What I post is one possible solution out of the many other users have stated. Nothing more. But I take it further by putting in instructions and explaining why things might be happening, which many here do not do. Their statements of "Use the hacked version of HD Setup" is a partial answer because they do not explain how or where to get it as it is not on the Apple System Install CDs. And many times I seen "go to Macgarden.com to get such and such software" when it is in the past I noticed admins deleting such links and giving a warning that Macgarden is a software piracy site, but not as of lately. Yet when I post something about System 7 and HD partitions, you jump on my post.
Now, people here do not have to take my information I put up as fact, knowledge from experience or advisement. If members here find that another's information to work for them, then that is fine and I am glad that they were able to find a solution to their Mac problem(s) without my help. I am here to help out by stating what I know from old Macs and the experiences I have with them since 1986. And I'm not here to look for brownie points either, if somebody is able to solve an issue they have with their Mac with what I proposed then good for them. I'm not here to take credit from anyone even if my advice worked for them. Case in point: a certain member here had an issue with a CC and a 8GB SSD under System 7 which would partition and format in 2.0 slices but it did not work (files would not copy and a system could not install). I advised for him to shrink the partitions to 1.9GB, which he did and the problem was solved. Did I take credit for it? No. Did I brag about it? No. Did I jumped up and did a happy dance of victory? Hell no.
I'm just here to share information, experience and knowledge. We can discuss what works and what does not work and why. That is what any forum is about. So lets enjoy the fruits of our labour, in this case - restoring old Macs to working condition.