I notice that the IBM WD-325N HDD has a 4KB MCU. It's amazing what could be done with a tiny amount of ROM and RAM in those days.

In the case of AT (IDE) drives:
AT (IDE) drives can be divided into three separate scenarios: Early,
Swift and ZBR.

1. EARLY: When AT interface drives (aka IDE - integrated drive
electronics, but so are SCSI's) were first introduced (ST157A family),
we strongly warned and cautioned against any attempt to lo-level
format the drives because 1) the factory written defect-mapping files
might be erased on reserved areas of the drive, and 2) the optimized
interleave and skewing values used would be forfeited giving slow
transfer rates. At this stage of development, SGATFMT3 lists these
drives only as a fall back option, in lieu of a factory repair format.
If the drive has somehow lost its original format, or the partition
structure been corrupted by a virus etc., SGATFMT3 could be used to
reformat _without_ the benefit of the defect mapping files. Any
defects will need to be "rediscovered" again; first, by the DOS high
level format and second, by a third-party disk scanning utility.
These utilities are quite likely to locate all of the hard errors, but
unlikely to find the soft errors. The only way to completely evaluate
a drive for both hard and soft error is by a factory repair with
extremely sophisticated diagnostic equipment. (See the glossary
section for HARD and SOFT ERRORS.)

2. SWIFT: As the AT interface products became more sophisticated
with new technology and the introduction of the Swift drives (models
like ST1239A, ST1201A etc), lo-level formatting became pretty much
"half" of a problem. When these drives are in translation mode
(non-physical geometry definitions), a lo-level format is harmless to
the factory defect-mapping files and optimized skewing (albeit
destructive to user data) since it doesn't re-sector the drive. If,
however, the Swift drive is in true physical mode, then the lo-level
format will re-sector the drive.

3. ZBR: Finally, today's AT interface drives (like the ST-1144A and
ST-3144A) are often Zone Bit Recorded (ZBR). ZBR drives, have variable
sectors per track, depending on the zone of the drive. The outside
tracks, being larger in circumference (i.e. track length is longer),
are able to hold more sectors than the innermost tracks. In this
scenario, it is IMPOSSIBLE to define the drive in CMOS setup with true
physical values. Cylinders and heads, yes.... but not the sectors per
track. Therefore, these drive are ALWAYS in translation mode and
immune to a re-sectoring lo-level format. On ZBR AT interface drives
(Seagate, at least... others UNK), the factory defect mapping files
are fully protected, and since the drive is always in translation, the
optimized skewing is also protected.

Well, as the drive is already toast a try was worth anyway. But now I'm going an alternative route and I have something cooking in the pan. I don't know if that's gonna be successful and there's a high probability it won't, but we'll see. More updates on this later.

I saw yesterday your post on Vogons, today I'll post some photos of the ST125N's circuit board. As I use a dumb phone and I don't have a smopho (smartphone), I made the previous photos with an old Microsoft Phone I had around, that's why they were so crappy. Today I'll use something better.