The PC5 will
not recognise a 3.5" disk, even using driver.sys to set the
parameters it always gives a "device not ready" error.
What Fred said
about pin 34. Also, make sure that the 3.5 is
jumpered right--I don't know how closely the Commodore followed
standard PC conventions.
if the LED on the drive lights, try masking off pin 34 (Disk Change/Ready)
if the LED does not light, drive select jumpers and/or cable