This means that mtools is having trouble accessing the drive. This can be due to several things.
Often this is due to the permissions on floppy drive devices (/dev/fd0* and /dev/fd1*) being incorrect. The user running mtools must have the appropriate access. See the manual page for chmod for details.
Most versions of mtools distributed with Linux systems (not the standard GNU version) use the contents of a file /etc/mtools to determine which devices and densities to use, in place of having this information compiled into the binary. Mistakes in this file often cause problems. There is often no documentation about this.
For the easiest way to access your MS-DOS files (especially those on a hard disk partition) see How do I access files on my DOS partition or floppy? Note—you should never use mtools to access files on an msdosfs mounted partition or disk!