I'll throw this out here, though I don't know if this is your issue... the Wallstreets had issues with some hard drives that produced a magnetic field (mostly those made by IBM) that isn't an issue when using the same drives in just about any other type of PowerBook (I had a 40 GB drive that worked great in my 3400c, but locked up my Wallstreet).

If this is an IBM drive (even if it is one Apple shipped with other systems), it most likely won't work.