The detailed atomic structure of the binary icosahedral (i) ScZn7.33 quasicrystal has been investigated by means of high-resolution synchrotron single-crystal X-ray diffraction and absolute scale measurements of diffuse scattering. The average atomic structure has been solved using the measured Bragg intensity data based on a six-dimensional model that is isostructural to the i-YbCd5.7 one. The structure is described with a quasiperiodic packing of large Tsai-type rhombic triacontahedron clusters and double Friauf polyhedra (DFP), both resulting from a close-packing of a large (Sc) and a small (Zn) atom. The difference in chemical composition between i-ScZn7.33 and i-YbCd5.7 was found to lie in the icosahedron shell and the DFP where in i-ScZn7.33 chemical disorder occurs on the large atom sites, which induces a significant distortion to the structure units. The intensity in reciprocal space displays a substantial amount of diffuse scattering with anisotropic distribution, located around the strong Bragg peaks, that can be fully interpreted as resulting from phason fluctuations, with a ratio of the phason elastic constants K-2/K-1 = -0.53, i.e. close to a threefold instability limit. This induces a relatively large perpendicular (or phason) Debye-Waller factor, which explains the vanishing of 'high-Q(perp)' reflections.