I still haven't looked at the floppy drive but I installed A/UX 2.0 earlier by dd-ing the disc image onto a zip disk (similar to the method outlined here for 1.1.1)

It runs a lot faster on this hardware than 3.0.x, even from a zip disk. It would be nice to get this updated to 2.0.1 but I can't seem to find the complete update anywhere.