Compaq Portable II fails to boot - some analysis

I had to replace a 1/3 height floppy drive in a friend's sequencer one time. It was a 720k (80 track, double density 5 1/4") drive, and there was something wrong with the heads or read/write logic - it would appear to write disks, but could not read them back. Mechanical motions were fine. I ended up using a half height 1.2mb Teac drive that I hardwired to run as 720k. I had to strip down the mechanism and cut the aluminum casting down with a dremel on the front so it would match up with the 1/3 height opening in the front of the sequencer. The faceplate was able to remain mostly unmodified, and it hung over the opening on the front of the sequencer. All told it looked pretty good when I was done... however this probably wouldn't work on your Compaq, I don't remember there being enough room on the side of one of those things.