Hi,
May or may not be useful to you. I had a similar issue with a G4 power book which I inherrited as it would no longer boot.
I tried installing Linux on it and it got so far then crashed with a drive error. The drive showed up in the prep when installing OSX but kept erroring if I tried to do anything to it...
I got myself a torque driver that fits the screws on the G4 - one for all I might add.
Opened the case and the connector for the hard drive had become loose. It is just a flexible copper connector and the tape holding it in place had list its stickyness and the connection to the drive was "hanging on by a thread" hence the drive was visible but data was being lost with the poor connection.
Reconnected and it and put the case together... happy days - all working!
I went here to get details on how to crack open the mac book - apologies if this is old news:
http://www.xlr8yourmac.com/systems/powerbookG4_12in_HD_upgrade/PowebookG4_12in_HD_upgrade.htm
Was quite a painful experience but not so traumatic that it couldn't be done.
If there are no better suggestions I would certainly recommend cracking the book open and checking the connections
Hope this helps.
Cheers
Chris