You took the words out of my mouth!
Don't have access to the old box right now so I can't check the Bios to see what could be done. My memory is a bit shaky on this.
Dunno about the distro but I'm going to download DamnSmallLinux
and have a look. I'm new to Linux so can't help much there I'm afraid.
As for booting from a floppy, most distros have a folder "dosutils" somewhere which comes with "rawrite" and a boot.img to make a diskette to boot from. It very easy.
the docs and you'll be fine.