My Korg O1w/fd has a damaged disk drive.
Can anyone tell me how I can replace it
without spending too much money? The
repair shop wants about $250. I was
wondering if anyone knew of a compatible
disk drive I could but at a regular computer
store. Really appreciate the help.

I have no idea of what their pricing is really like, as I haven't yet had your need, but you should bookmark megafloppy.com, which offers several specific replacement parts for synths and the O1s drive in particular. Of course, they're in bleedin' ITALY, but even so, it could save you some bucks to walk in with the specific part in hand already.
Also, this may seem insultingly obvious, but check out korg.com and see what they say. If they're still stocking/using that same drive or can recommend a compatible one available domestically, it could save you some of that precious money. Good luck!