It is true that Zack is stabbed in the reactor, you aren't wrong about that.
All i know is that, There is something (don't quite remember what) in the Nibelheim Mansions basement that triggers a flashback, and all i remember of it is Zack and Clouds truck trip, how they got ambushed, and Zacks death, and Cloud grabbing Zacks buster sword, and doing that funny little lego-block hand wave in the air out of frustration.
The area where it happens sort of resembles that cliff edge so i think that fills in that gap.
However from when Zack gets stabbed in the reactor to the flashback,
I have no idea what happens between those two points.
I'll look into it for you, I'm currently in the middle of a Disc 2 save file.
EDIT:
Okay, i had a look at it. It seems that after the reactor incident, both Cloud and Zack are being kept/preserved in those funny looking tanks in the mansion basement.
They could be gettin tested on or something. During their mealtime Zack assaults the lab assistant and gets himself and Cloud out of there.
Then theres the truck scene, which is pretty much Zack ranting on about what he's gonna do when he gets to midgar, totally irrelevant.
Finally, We see Zack dragging Cloud along a cliffside. All of a sudden, Zack gets distracted, runs offscreen for a second, then runs back on, and is opened fire on by something unknown. Three Shinra soldiers show up, and Even though Zack probably already got no chance, the meanies just feed him an extra few bullets anyway. =]
They leave, Cloud crawls over, grabs his buster sword, and does the lego block frustration wave i mentioned, followed by the screen trailing off to the view over the cliff, Midgar. (this is also apparently the ending to Crisis Core)
So there ya have it. =]
Zack gets stabbed, preserved, makes an exodus, and gets shot. The End.
