They say "A picture says a thousand words"... well, here's a screenshot
 of the current version of FreeBee booting the System Loader and
 Diagnostics disc for the 3B1: 
OK, waht was the problem?
[...]
  I'm looking for other folks to help out with this
-- a reasonably
 experienced 68K coder would be useful, or folks who know how the WD 1010
 and 2797 Winchester and FDD controllers behave in 'real life'
 (unfortunately I don't have a 2797 to breadboard with). 
As you know, I am mch more of a hardware person, but I have talked ot the
1793 etc disk controllers (and the 279x is much the same as a 179x with
some of the support chips built-in). If oyu have any specific questions I
will see what I can rememebr...
I also have the data sheets for both these chips if you don't have them
-tony