But then I came across this blog detailing this replacement device on a Korg Karma
You can find them on Ebay for around $50. The website has more details, and the software to create the virtual floppies on the USB drive. You can store 100 floppies on each.
From what I gather, if the disk can be read on a PC, then it can be emulated, once the correct jumpers are set, and the USB stick properly formatted and so on. I tried the software on the website and it works on Windows 7