What system disk did you make?
From where is the source file?
The internal drive may be 400K only. If you made that disk on a newer machine, it may be written double-sided.
If you look inside the drive, it should look identical to that external drive, if it's 800K. If you see a large round thing in there, then it's 400K.
The easier thing to look for is to the sides of the opening. You'll see some lever switches facing away from the center of the drive. Again, if what you see inside the Mac is identical to that external, you've got an 800K drive inside the Mac.
-however- it is absolutely possible to use that 800K drive as a replacement for a 400K drive for purposes of reading disks created elsewhere. But a newer system software disk, formatted as HFS, will not boot on the old ROM, even if the drive is double sided. (800K)