It is not possible to create an 800K system startup floppy disk, though a
high density (1.4MB) floppy will hold a minimal System 7. For those
Macintoshes that have an Apple (FDHD) SuperDrive, making a bootable floppy
is simply a matter of running the System 7 Installer program, choosing
customize, and selecting "Min System" for your Macintosh model.
The initial recommendation for troubleshooting System 7 is to hold down the
Shift key on startup to temporarily disable any system extensions (INITs).
Some other suggestions for system software troubleshooting:
1. Attach an external hard drive that has System 7 on it and set
startup. Make sure this hard drive has appropriate and latest virus
checkers installed.
2. Run standard hardware diagnostics to check the hardware.
3. Completely replace the System 7 software if removing the system
extensions doesn't help. This is where it might be useful to have a
1.4MB startup floppy, so that you can at least get to the hard disk to
remove the damaged system files and set aside other files you want to
save.