Mac Classic doesn't boot from 7.0.1 Disk Tools

Hi!
I have a Mac Classic that I'm getting ready to sell. It has a good HD and boots fine. Aside from one issue, everything seems to be working perfectly.
I made 7.0.1 installer diskettes from the images on Apple's website. The Classic boots normally from, for instance, "Install 1," but it doesn't boot from "Disk Tools." Whenever I try, either the screen fills with garbage during "Welcome to Macintosh" or I get a bus error or address error.
I happen to have a known-good 7.0.1 Disk Tools disk. (It has an Apple label and came with some other computer.) The same thing happens when I try to boot from that. Also, disabling extensions doesn't help.
Both floppies (the imaged one and the Apple-labelled one) are readable if I start the computer from some other disk. The computer just won't boot from them.
So I have a few questions:
1) Is this a known issue, or is there something wrong with my Classic?
2) If it is a known issue, what version of Disk Tools will work with the Classic? I plan to sell this computer on the LEM Swap list, so I'll need to supply installation disks.
3) If there's something wrong with my Classic, where should I look first? The floppy drive? The logic board?
Thanks in advance!