Many thanks for your reply. I'll look into finding out more about how we made our images with Image Disk. It could well be that we used raw image as the file format. I do not know enough about this. I will ask my friend.
I've had a further play this evening. I thought about how the Lynx disk system distinguishes between 200K and 800K floppy disk drives. When formatting disks, it tests the drive by stepping it to beyond track 40 and sees if the drive continues to send track increment pulses back to the controller. If it doesn't, then it knows it's a 40 track drive and formats accordingly. Otherwise, it knows it has an 80 track drive. There's no 40 track / 80 track hard switches as there are with the BBC micro! With this in mind, I thought the HxC will probably keep on sending track increment pulses back, and that's why it hangs when trying to format to 200K. So, instead, I tried to format to 800K. I set up four HFE images, adjusting Sector ID Start, and Reverse Side. None worked.
I'll report back on any further news as and when I can.
Maybe that you should activate the "double step" feature of the HxC Floppy Emulator.
Can you dump some disk with the HxC Floppy Emulator software please ?