I'm way late to the party here but I have a v5.1 with a 2GB card, formatted with Apple HD SC Setup 7.3.5 and then installed 6.0.8 on it. Won't boot.
Then I did this: http://www.codesrc.com/mediawiki/index.php/Mac_Plus and it worked. It booted.
Make sure "Enable Unit Attention" is OFF
Change SCSI Selection Delay to 0
Enable "Respond to short SCSI selection pulses"
Use the latest scsi2sd-util from here http://www.codesrc.com/files/scsi2sd/latest/ to make the changes.
USB is enough to power it.
Make sure you first "load device" make changes and then "save d