Is it possible to replace the SCSI optical drive with an alternative drive


Yes, as later Capricorns were fitted with SCSI Zip drives. The one to use is the 100MB SCSI Zip drive (not IDE), and these are readily available as either new or second hand on ebay.

In order to use the Zip drive, the boot proms on the Storage Node must be version A3 - these are normally labelled as IG502A3, and IG503A3.