I'm on installing OS 8 on this machine. The HD utility in OS 8 does not recognize the HD as an Apple drive, so I used Lido again. Strangely Lido detects the drive as 78 gig, while it is 20 gig. Any idea?

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Lido? Never heard of it. use FWB hard disk toolkit. Or just go onto ebay and purchase a 36gb SCSI drive. They are selling for 99c right now. That's what I had in my 9600 with an SCA to SCSI adapter, worked great.