What might cause my Commodore 1541 and FSD-1 disk drives to have a bus conflict

I'm seeing some strange behavior on my Commodore 1541 and FSD-1 disk drives. Both drives seemingly work fine when attached to the C64 by themselves, but if I set the FSD-1 to be device 9,10 or 11 - and also attach the 1541 (as device 8) I get the following problem:

If I turn on both drives, and then turn on the C64 the reset/initialize signal is sent to both devices and they momentarily light up their drive access light and spin the drive motor. That seems like normal behavior. But when I try to access either drive the C64 will hang with no disk activity. Run/Stop-Restore will return the C64 prompt. Turning off either drive will allow me to access the other (powered-on) drive; and most weirdly - re-powering the drive I just powered off will seemingly 'fix' the problem (both drives will now access data correctly based on their device number).

I've also (anecdotally) noticed turning off one drive might cause the other drive to spin the drive motor (similar to a reset/initialize command).

I've fiddled with the cables, the order of the drives, and the device id of the FSD-1 (which has some DIP switches on the bottom), but I have not tried to 'hardware' re-assign the drive id of the 1541.

By way of background, both drives are 'new' to my environment. The 1541 had a bad 6522 that I recently replaced. Note this is my original 1541 from forever-ago and the chips mostly carry a 1982 date stamp (ALPS with a long-board). The FSD-1 was a recent impulse-purchase off E-Bay. I believe the drive was refurbished, it is very clean, quiet and seems well lubricated. The only version of the FSD-1 manual I can find makes no mention of the DIP switches for changing the drive id - but I'm almost positive they are not 'hacked on' - they look original to me.

I'm baffled. Obviously the FSD-1 manufacturer wouldn't produce a drive that couldn't co-exist with a stock 1541, so it feels like one of the two drive isn't playing nice on the bus. Unfortunately, I don't have another 1541 to see if the problem 'stays' with the FSD-1, or 'disappears' with the removal and replacement of the repaired 1541. I do have a 1581 and an SD2IEC, but both seem to co-exist happily with either drive.

Can anyone offer any ideas that I might try to further troubleshoot this?