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It may be nothing worse than dirty read-write heads in the floppy drive. They get gummed up over time with dust, dirt and material from the surface of the recording media. You can buy specially made cleaning kits for them -- just a floppy disk containing absorbent cleaning pad & a bottle of mild solvent.
Don't put too much faith in Device Manager. It's usefulness is limited to problems with drivers and resource conflicts. It has no idea if a device is broken or needs cleaning.
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