Come to find out, the issue with the floppy is not the floppy at all. The system will refuse to boot ProDOS whenever there are two storage devices. I have a total of three storage devices, LPC ROM, HDT file located on a PC using a serial port, and the floppy. I have been using the LPC disk for booting. I tried a test, I booted using the LPC drive and I disabled the floppy. But the PC was connected and the ROM for the serial port was present. It failed to boot just like with the floppy. I then booby trapped the ROM for the serial port to see if any code was executed, and it was not. So just that there is a ROM for a storage device being present is enough to make ProDOS croak.
I basically have given up for a while. If anyone has the Digilent FPGA board and wants to try it out, version 0.9 can be downloaded from gbfpgaapple.tripod.com. It emulates a unenhanced 128K Apple ][e with the LPC drive in slot 7, dual floppy in slot 6, and a 6850 UART in slot 5. The code for an IDE/ATA/Conpact Flash has been commented out and is guaranteed not to work. There is also a program on the same site to convert ROM files into a text file that can be merged into the Xilinx internal memory code. This will allow you to boot with no additional hardware, except the PS2 keyboard and monitor of course. The existing memory files tries to load the ROMs from the LPC ROM. I have not released the serial drive code yet as it has not been sucessfully tested. Hopefully I will put this there this week. If it is not there by Friday, it will not bee there until sometime next week as I am on vacation Friday through Monday. For sure, the LPC drive works, but it requires you to build the hardware. The serial port also works, but there is no ROM.