Okay, I have success!
So I am going to summarize what I did to get it to work in case someone else has this same exact model.
First, the system will not boot the CD because of two items, the first being the CPU is not on the white list (causing a grey screen) and second the audio driver which will cause the system to crash and bomb while loading.
So I need to add the followinh in Open Firmware:
1. Enter Open Firmware by turning the machine on and holding Opt and Cmd plus O and F
2. Enter the following commands, be very careful to check for selling and spacing:
nvedit
dev /cpus/PowerPC,G4@0
80010201 encode-int " cpu-version" property
dev /pci@F2000000/mac-io/i2s/i2s-a
" screamer" encode-string " compatible" property
device-end
CTRL+C
nvstore
setenv use-nvramrc? true
reset-all
I was able to get the CD to start up.
Since I used SuperDuper to copy my existing Mac OS 9. I copied the MAc OS ROM 10.1 to the System Folder and removed and readded Finder and System to bless the folder (This can be done from Mac OS X by entering: sudo bless -folder9 "/System Folder" in terminal)
What Works:
USB 2.0
FireWire
What doesn't work:
Video, so obviously I can't make brightness adjustment and my Resolution and Colors are stuck to default. The weird thing is if I startup using the Boot Screen (Holding Opt during boot and go into Mac OS 9) I am stuck with 256 colors. If I boot using the startup disk option Control Panel (via Mac OS 9 Control Panel) I will get millions of colors.
Audio, Audio doesn't work since it was needed to be disabled to get Mac OS 9 to even boot. I am sure I can use a USB option it Mac OS 9 drivers are available.
I know that there is an option for a standard framebuffer video driver that will allow you to change color depths and resolutions but have been unable to find them.
Not being able to adjust brightness is also a bummer, no solution found.
Also for further reference:
Audio is Texas Instruments TAS3004
Video Nvidia FX5200 Ultra
Also, Mac OS 9 Partition needs to be the first partition, if you have it on the second partition I seem to get a flashing disk icon. When experimenting I can even get it to boot if it is the Third partition, just not the Second, don't know if it is unique to my system set up, but if you run into this you know what to do! Also, if you are using the drag and drop method you obviously need to have the Mac OS 9 driver installed which can only be done by Mac OS 9 Drive Setup utility or Mac OS X. Strange enough If I boot using the Mac OS X 10.4 DVD and use Disk Utilities I am not presented with the option to install driver during partition process, I had to use Firewire Target mode to partition system using another Mac with 10.4 installed.