just a tip
as this was happening to me all nite before i realized
holding c to boot the cd DOES NOT WORK at all...
but using an older keyboard the ones that were originally used for g4 powerpcs
totally works...
so if u are pulling out your hair wondering why it wont boot from the cd..
or accept pretty much any of the normal cmd-option shortcuts to do things like reset pram
that may be why
the only other reason could be that i had it connected via a usb extension cable but im pretty sure its because the keyboard has some slight differences that makes the g4 not recognize
the special shortcut key combinations!