The process described below has been completed!
See http://freebsdnow.blogspot.com/2013/10/happy-20th-birthday-freebsd.html

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Download the FreeBSD 1.0 install CD.
  http://ftp-archive.freebsd.org/pub/FreeBSD-Archive/old-releases/i386/ISO-IMAGES/FreeBSD-1.0-RELEASE/cd1.iso

Create a blank 3G hard disk image to hold the source files.
  # dd if=/dev/zero of=msdos.img bs=64k count=48k

Create a blank 1G hard disk image for the FreeBSD disk.
  # dd if=/dev/zero of=fbsd1.img bs=64k count=16k

Make it into a device.
  # mdconfig -f msdos.img
  md3

Partition it with MBR.
  # gpart create -s mbr md3
  # gpart add -t fat16 -s md3
  # gpart set -a active -i 1 md3

Format with FAT and mount.
  # newfs_msdos md3s1
  # mkdir /tmp/fat
  # mount -t msdosfs /dev/md3s1 /tmp/fat

Copy the FreeBSD files onto the FAT filesystem.
  # mount -t cd9660 /dev/`mdconfig -f FreeBSD-1.0-RELEASE.iso` /mnt
  md0
  # rsync -av /mnt/ /tmp/fat/
  (ignore permission errors)
  # umount /tmp/fat

Release the disk image file.
  # mdconfig -d -u3

Filesystem floppy must be writable, so copy it to a normal file.
  # cp /mnt/floppies/filesyst.flp /tmp

Boot the install floppy that supports IDE.
  % qemu -m 16 -cpu pentium -hda fbsd1.img -hdb msdos.img \
    -fda /mnt/floppies/kcopy_ah.flp -fdb /tmp/filesyst.flp \
    -boot a -enable-kqemu
  (enter B for filesystem floppy)
  (accept defaults)
  # halt
  (after halt, press a key to reboot)
  (press Enter when it asks for the filesystem floppy)
  kc> copy
  kc copy to> wd0a

Start the VM with the cpio floppy.
  % qemu -m 16 -cpu pentium -hda fbsd1.img -hdb msdos.img \
  -fda /mnt/floppies/cpio.flp -enable-kqemu
  (press Enter to accept drive 0)
  (accept defaults)
  # halt
  (automatic reboot)
  # set_tmp_dir
  (accept defaults)