I’m a new ZuluSCSI owner with a 1040STE, so here are my comments. BlueSCSI Pico is similar to the ZuluSCSI RP2040, but not identical.
1. You are running the initial Firmware on your BlueSCSI. There have been 3 releases since then, that make lots of enhancements. You’ll find the newest releases here https://github.com/BlueSCSI/BlueSCSI-v2/releases
2. In your log file above, I see multiple references to .hda file and Apple images. This looks incorrect if you are using ICD Pro drivers, which require a .img drive drive. Try rebuilding your BlueSCSI.ini using one of the IMG types at the bottom of the list.
Just my two cents.