When I remove the aca500 and try to boot, I get the kickstart prompt but my kick start disk does not seem to be recognized.
So you're saying that before you started using the ACA500, the KS and WB disks worked. But after installing and using the ACA500 (where everything also worked) then removing the ACA500 the Kickstarter disk now doesn't work?
Is that what you're saying?
It sounds to me like the Kickstarter disk is probably borked. I wouldn't be entirely surprised if that floppy drive is full of dust and some got chewed into the disk during a read.
FWIW, if you load up to Workbench and put a Kickstarter disk in, one of two things should happen.
In a best case scenario, the disk would be read and mounted onto your Workbench with a disk label of "KICK" below it.
In a worst case scenario, the disk would be read, fail, and say "DF0:BAD" as its label.
Are you saying that yours doesn't even mount a disk image of any kind on the Workbench when the ACA500 is not connected?