jmatt,
The red line on the cable goes to pin1 on both the board and the drive. On the drive this may be next to the power plug or away from it depending on the drive, in either case that is not the problem here, if the cable is reversed the drive will not work at all and the drive light stays on constantly.
dadaemdo,
Have you checked your BIS settings, make sure the Floppy is enabled and set to 3.5" 1.44MB. Also check the cable is fully plugged in, remve and reseat it a couple of times.
If these do not solve it I would suspect a faulty drive or motherboard, can you get hold of another drive to try or alternatively try that drive in another system.