Very common problem with floppy drives as they age is dirt and corruptionvon the heads.

First thing I would do is a good head cleaning.

Mu ImageDisk has a pretty good "clean heads" function, where it "scrubs" the heads back and forth on the cleaning disk.

If you don't have cleaning discs you can often make passable ones from paper in a disc sleeve (easy on 5.25", tricky but doable on 3.5" - just make sure you have a suitable cleaning solution (or at least some alchol).

I have already cleaned the heads using a Q tip and alcohol. I just scrubbed them again as hard as I could without breaking them, no dirt came off and it still won’t read the disk.

Qtips can work but you have to be dead-careful not to damage the head mounting.
Very easy to damage on the upper head, much sturdier on the lower head.

Perhaps the drive was knocked intoi poor alignment in the shipping roughness...
Does the head assembly appear at all "lost" (ie: can you fee;/see it move "by hand") - best way to test this is with power off, manually move the stepper to put the head near the middle of it's travel.

Do you have another floppy drive you can try in the system?
This woiuld help determine if the problem is in the drive, or the system.

Or ... do you have another system with a floppy controller and cable (you could probably use the cable from this one).

It would be interesting to know if another system using the same drive also has problems reading sometimes,
and if you make a system disk on the drive in that system, does it work on the Tandy. Formatting a disk on a drive with bad alignment will make a disk which equally bad alignment which should work well on that drive.

Also worth trying to make a single-sided boot disk. As mentioned above, the upper head is more susceptible to physical damage. A single sided boot disk would only need the lower head.
(sorry - I don't even recall if the PC/DOS can do single-sided boots - I *think* some earlier versions can - I can look into this more if this becomes needed)