RAM Disk startup bug in Mac OS 8.1; reportedly fixed in Mac OS 8.5

Ken Goff writes: "I had a problem when restarting with extensions off on a brand new G3/333 w/ultra wide SCSI where a dialog comes up saying "This disk is unreadable by this computer. Do you want to initialize?" After 4 phone calls (2 to the reseller and 2 to Apple), I learned it was a bug in OS 8.1 involving G3's and a RAM disk. I was being asked to initialize my RAM disk but declined since it was calling it by the same name as my boot up volume "Macintosh HD." Apple tech support told me the tip off was the disk size reported which was indeed the size of my RAM disk. The size I did notice but did not want erase my boot up volume. As I reported, the only way to dismiss this dialog was to force quit the Finder. I've run RAM disks on my 604e unit and never encountered this glitch. Apple claims that this is fixed in the soon-to-be released OS 8.5."

Update: Several readers report that this bug is not limited to G3 Macs. Indeed, it happens to me all the time - whenever I startup with extensions off. Simply click to Initialize and you will be okay.