Here's the progress we've made:
1) The 36 MiB floppy image had to be created by hand, but that's done (by myself), and it's available for download.
2) It was truncated. That's been solved by using DCopyNT (by Jorgen Bosman).
3) The image is empty (at least that's what the FATs say...) so it must be populated): VDM (by jaclaz) / VDK (by Ken Kato) solves that nicely
4) The bootable ISO must be created. That's solved now by using The Free ISO Creator, by miniDVDsoft.
5) I've used Nero 6.6 to burn the ISO onto a physical medium (a mini-CD RW, in my case)... but any burner can do it, so it's not a problem.
Of course there are some hexediting to be done, for adjusting the Media Type in the El Torito Boot Catalog Default Entry (and more hexediting in case one wants to substitute the boot sector in the floppy image), but that's acceptable.
But what I miss is having an application to edit the ISO 9660 part of the ISO. I tried UltraISO for that, but it trashes the image. My current working hypothesis is that UltraISO might do it right *iff* (iff = if and only if) one changes the media byte to 0 (no-emulation) before editing, and then, after all is done, changes it back to 3. This is what I'm going to test from now on.
This is why I said this approach is not simple.
@Multibooter: Do look into this, if you really are interested in > 100 MiB bootable diskete images working in optical media.
Unfortunately, the BIOS controls the CD's Floppy Emulation. The BIOSes I have tested, do not support LBA Mode and force the Geometry to 2x36 at best. With 1024 Cylinders, this sets the limit to 36MiB. You can define a larger Partition, but it will simply wrap back to zero when you pass 36MiB. You would need your own Code (DDO) to access the rest of the Image. You can do larger Images but only as Hard Disk Emulations (C:). Usually people just create a small Bootable Image and add the rest to the body of the CD.