Hi,
You could always try a
PRAM reset to begin with.
It cannot be ruled out that the hard drive is defective. Do you hear any sounds?
Are you using an original (System 7.0.1) startup/tools floppy right now?
If the hard disk is spinning (and if you have access to a second old Macintosh computer), you could also try another disk utility (such as Apple HD SC Setup 7.3.5
here or Drive Setup 1.7.3
here). Post back if you need advice regarding floppy modifications et cetera.
Battery issues have been discussed e.g. in
this FAQ. There you will also find additional information about hard drive detection problems.
Jan