Ouch, I better be reading more carefully, HDTOOLBOX....
No experience with OS3.5 or 3.9 version, just 3.1.
Did HDINSTTOOLS (I guess that's a program from Aminet) reported same error code ?
It seems to me that you tried to perform automatic installation which has some kind of issue. Maybe you should answer no when asked and then proceed to manual install. There should be some option for reading disk configuration - try to write down feedback and then compare it with values labeled at disk sticker. Use smaller disk for start.