Did you see any error messages on the floppy I/O? I've seen the floppy driver fail in several cases. I have a Pentium 120 laptop here in which the floppy works when cold, not when warm. Windows 95 runs that floppy just fine.
The fix is probably to "tune" the floppy timing parameters automaticaly in the driver when there is an I/O failure. Not that I have time to implement that. Thanks Bruce