I'm assuming that when a 3.5" drive is in use, the IIgs software uses pin 16 as a register select (like the Mac), not a direct head select. One of the drive registers is the head select, so the Mac doesn't need a separate pin for it.
OK, so pin 4 on the IIgs is an output, with an in-line series resistor according to the doc. And when the IIgs wants to enable a 3.5 drive, it sets pin 4 high, as well as setting either pin 17 or pin 9 low depending on whether it wants the first or second 3.5 drive. Does that sound right?
If that's the case, then because Floppy Emu ignores line 4, it's going to respond whenever the IIgs sets pin 17 low for either a 3.5 or a 5.25 drive. So it may be getting confused if it checks to see if there's a 5.25 drive connect and then Floppy Emu responds. Or maybe it tries to set pin 4 high, then checks the actual voltage on pin 4 (after the series resistor) to see if it's high or low, and if it's low it assumes there's a 5.25 drive rather than a 3.5 inch drive.
OK, so pin 4 on the IIgs is an output, with an in-line series resistor according to the doc. And when the IIgs wants to enable a 3.5 drive, it sets pin 4 high, as well as setting either pin 17 or pin 9 low depending on whether it wants the first or second 3.5 drive. Does that sound right?
If that's the case, then because Floppy Emu ignores line 4, it's going to respond whenever the IIgs sets pin 17 low for either a 3.5 or a 5.25 drive. So it may be getting confused if it checks to see if there's a 5.25 drive connect and then Floppy Emu responds. Or maybe it tries to set pin 4 high, then checks the actual voltage on pin 4 (after the series resistor) to see if it's high or low, and if it's low it assumes there's a 5.25 drive rather than a 3.5 inch drive.