Sorry for being brief, I am posting from an iPhone.
Brett, I've got almost the same machine that you've described. I've experienced similar issues with my SE/30, however when I followed the instructions on Gamba's page on installing on a SE/30 with IIsi or IIfx ROM, it worked. Give it a try.
As for the suspect HDD, it might be that when formatted the disk is larger than 2Gb and System
7 doesn't play well with disk volumes over 2Gb, try partitioning say 1.5 and 0.5Gb and install on the larger partition and see if that works.
Brett, I've got almost the same machine that you've described. I've experienced similar issues with my SE/30, however when I followed the instructions on Gamba's page on installing on a SE/30 with IIsi or IIfx ROM, it worked. Give it a try.
As for the suspect HDD, it might be that when formatted the disk is larger than 2Gb and System
7 doesn't play well with disk volumes over 2Gb, try partitioning say 1.5 and 0.5Gb and install on the larger partition and see if that works.