The ST-506 does not support buffered seek and must have controller-generated write current reduction at cylinder 128 for correct operation. Many drives in their old age suffer from media degradation and will often benefit from earlier write precompensation or write current reduction, I suggest starting at 128 and moving to 64, then 0 if all else fails.
The ST-506 shows up before IBM even released the 5150, let alone gave it support for BIOS extensions. It would have been very unusual to see a hard drive at all in such a machine, and even the early Davong setups used 10MB mechanisms, I believe provided by Disctron. Most XT controllers expect a minimum number of 306 cylinders.
It's not "Period correct" 1981/1982 hardware, but the Western Digital WD XT-GEN with the Super BIOS is always a favorite card for running ST-506 drives, as it supports unbuffered seek mode and write current reduction.
There are plenty of controllers which can generate this signal and have unbuffered seek, my personal favorite being the Zobex 4HDC, one of very few quad drive controllers. It supports both RWC and unbuffered seek, as well as the CNGCAR signal used by the early removable cartridge drives, like the DMA 360 or SyQuest SQ-306RD.
Something I am on the lookout for is an AT controller which supports unbuffered seek (You can tie the RWC pin to ground on the drive and operate it at reduced write current at all times). Unfortunately, I'm not personally aware of any card which can do this!
For the most part, the ST-506 itself would have seen most of it's application in either a translated scenario (running through a SASI controller like the SMS Omti 3100 or Adaptec ACB-4000) or with a dedicated control card, like the Convergent Technologies AWS workstations and many industrial controllers. It was not until the much, much faster ST-412 came around that the interface and drives became popular in the PC world.