Depending on the age of the drive: are you operating this HDD in 66MHz
mode? If so, use WD's utility to turn it off [Linux will install on the
33MHz speed this will drop down to]. Next, since you said you have an
overlay, you have to boot from the overlay as it is installed on the HDD,
pause it just after the overlay is loaded (it pauses very briefly for this
purpose, or there will be other instructions), then continue the boot with
your chosen floppy. The exact method varies depending on the particular
overlay and what version of it you have (I hope you have the documentation
for the overlay, or you may end up talking to the WD technical support
people).
As a former computer technician, the idea of running Linux from an
overlay is frightening [and I didn't know it was possible] -- run ANYTHING
that way only if you have no other choice (i.e. a motherboard limitation);
I've seen what can happen.
-Gary Prichard-