Well, I finally figured it out! It took a lot of work to get everything working, so I'll share the entire formatting process and common issues that might show up while trying to format a drive. And I was also able to get my hands on the 1 PLCC chip version of the controller, so I was able to experiment with that one too!

Connect the 3-pin header on the front of the drive to a USB to serial adapter (or to your Lisa's serial port if you want to have some fun with LisaTerminal!) so that you can access the drive's diagnostic interface. From left to right, the three pins on the header are GND, TX, and RX. Note that, contrary to information that I read somewhere else, the serial interface does NOT use TTL logic levels, so it's completely safe to hook it up to a USB to RS-232 serial adapter. Set your terminal software for 2400 baud and CR line endings.

Now burn one of the attached patched ROMs to a 27128 EPROM and install that in place of your controller's original ROM. Use the revision C ROM if you have the controller with one PLCC chip and the revision D ROM if you have the controller with three PLCCs. The ROMs have been patched to enter the formatter every time the diagnostic interface loads (the original ROM will skip over the formatter if an error flag is set, but this error flag is always set when we enter diagnostic mode, so the formatter never runs) and also prints out the welcome message without waiting on the user to send a CR first.

The drive will only enter diagnostic mode and print something out over serial if it's unable to read the system track from the disk. So a working (or semi-working) drive might never enter diag mode without some help. If you aren't getting the welcome message in your terminal software, try unplugging the MFM data cable to make the controller fail to access the drive. Of course, plug this cable back in once the diagnostic interface loads.

It can take up to 20 seconds from power-on for the diagnostic interface to print the welcome message (or even longer if the disk is completely dead), so be patient!

The formatter should now ask you for your drive's parameters. The following snippet shows the interface and the values that should be entered at all of the prompts.

Lisa Diagnostic Utility Routines Rev. D
No drives online.....
Enter Last cylinder number -2 613
Enter Number of heads -1 3
Enter Number of sectors -1 16
Enter Precompensation cylinder -1 299
Enter Lun status byte 0
Enter Flag byte 0
Enter Interleave Factor 2

Initializing the system track
Formatting unit....
Drive rezeroing..
Enter Defect list .. Null input to exit

Head

Is the above input(s) ok ? (yes/no) Y

Drive rezeroing..
Verifying data tracks.. Please be patient
Drive rezeroing..
Drive rezeroing.. (this second rezeroing message only appears on the three-chip controller)
Initializing the lisa system track
Hard disk install complete.. Ready for MacWorks
RESTARTING SYSTEM !!!!

Note that the "Enter defect list" code is broken and won't let you enter defects, so just send a CR when it asks you to enter defects and confirm that the empty list is correct by pressing Y.

If your drive has been previously formatted by some other system (like a PC) or the Sun20 format is just super corrupted, the formatter will probably fail at the very first step with an "Error in initializing the system track" message. If this happens, you'll be dumped straight into an "&" prompt where you can enter commands. Enter the commands "RZ!", "F!", "RZ", and "F" in that order (all of these are really quick except for the F command, which takes a couple of minutes) and then send a ctrl+R to reboot the controller once they've executed. Now the formatter should come up again and you should be able to proceed through the format successfully.

The drive's stepper motor will make a ticking sound during the "Formatting unit..." and "Verifying data tracks.. Please be patient" steps. If the ticking during data track verification is a lot slower than the ticking during the formatting step, it probably means that your disk is bad.

After the formatter says that the drive is ready for MacWorks and reboots the controller, the drive should be ready for use. Since the format presumably succeeded, you shouldn't get anything over serial anymore whenever you power up the controller. And it's fine to switch back to the original ROMs now that the disk has been formatted!

The formatting procedure is identical for both the 1-chip and 3-chip versions of the controller and a drive formatted on one controller seems to be transferrable to the other, at least in terms of the low-level formatting itself. The actual user data that's stored on the disk will be garbage if you move the drive from one controller to the other, but you can just overwrite it with new data if you want. Note that the spare table will be corrupted too and there's no way to rewrite the spare table without formatting the drive with the controller that it's actually going to be used with, so swapping formatted drives between controllers should probably only be used as a diagnostic aid.

And as we would expect, the controller will work with pretty much any 20MB MFM drive. I've tried it with every 20MB drive that I have and they all worked perfectly!

I hope this is helpful to others who are trying to get their Sun drives up and running!