The Z-RAM Card should be on a Internal Mac Like Floppy connector at the bottom of RAM (near the outside edge under the keyboard). It should be removable quire easily but pulling up on it. Unless somebody glued it in place. That would be strange but I seen it done.

I think that the disk head (only 1) is dirty and needs demagnetizing. If it can read and boot, there is no problem with the hardware electronics it self.

There's two switches next to the apple logo above the keyboard. 1 is for the 80 column card. It should be pressed down before turning it on. When you break out into DOS, type "PR#3" [ENTER] and it should get you into 80 column mode.

The second switch is for keyboard type: QWERTY or DVORK. Make sure it is up for QWERTY.