When I put a diskette in my floppy drive it spends several seconds trying to read it and then asks me to insert a diskette in drive a:. Has my 3 month old floppy drive failed?
If it's not a CMOS issue then the drive probably bit the dust. Especially if formatting a disk is unsuccessful. It happens.
It's also possible that you have a virus. Some viruses infect floppy boot records and hard drive boot records, and attempt to spread to floppies. With newer Windows OSs, these viruses can sometimes cause conflicts. Do a virus scan before ruling the hardware as the cause.