Again thanks for your thoughtful input. I am not surprised I do not understand how UNIX hosts work. As I said before, I use Macs so I don't have to. Somebody else works it out for me and it is otherwise transparent to me. Sadly, that becomes a problem when I need something outside the general parameters of Apple and its support communities' focus.
For me, trying to wrap my head around UNIX commands is a real headache. However, you are correct, if SheepShaver can directly access the ZIP disk then that would be the best option. Certainly "dd" on a 1.44MB disk is not such a risk or as time consuming, so no real loss there. I will reproduce your efforts with a flash drive using my ZIP disk under Snow Leopard and SheepShaver and see what comes of it. With any luck, it will yield and easy to setup method for mounting a ZIP disk directly in SheepShaver. Hard drives are less practical because they typically require a SCSI interface on any Mac which would require HFS.