OK, keep in mind that 2.1/4.1 is not "magic" it's just 2.1/4.1 unmodified. I chose 2.1 because it is only about 3K bytes different than 2.0 (yet HFS "aware"), whereas 3.0 is significantly different (almost double the size, fonts notwithstanding). The modified HD20 INIT is the only "magic" element this time.
Interesting results and thank you. Your second test I do find encouraging. Obviously you don't want to initialize your HD20, but for someone with an HD20 that has nothing on it, I would be most interested to learn the results of clicking "initialize" instead of "eject". Perhaps my HD20 will magically begin working again one day!
You did try booting with an unaltered HD20 as well correct? I am somewhat surprised that a clean 2.1 & HD20 INIT did not at least "see" the HFS formatted drive as it does with an 800K HFS disk on my Mac, but perhaps the fact you had a system on your HD20 at all prevented the drive from simply mounting and instead kept locking up as it tried to hand-off the system and the hand-off may require the 5.0 Finder. I would certainly use the exact same system and Finder on your HD20 as the boot disk in any event for these tests. Verifying the clean system 2.1/5.0 HD20 v1.0 INIT compatibility with your current 4.1/6.0 system would be helpful too.