Can't find valid destination for OS!!

Question

Oh dear oh dear. Our Power Mac has been dying a slow death but we didn't take the early signs to be things we should act upon and didn't know about software like Disk Warrior.
After having trouble booting up and having the computer crash, as well as not respond to fsck -fy and Disk Utility repairs, I tried re-installing the OS. I think I may have repartitioned the drive first as well.
On installing I think I accidentally used the wrong disk and it froze before the install was complete. It didn't recover from this so I restarted the machine and found that the hard drive had vanished and disk utility couldn't find it. I put the computer in a cupboard and said I'd go back to it.
Having purchased Disk Warrior this week I tried to revive the Power Mac using that. I ran DW twice. The first time was so quick i wondered it I'd completed the process. The second time took ages.
When not booting from a disk I get a Folder with a smiley face alternating with a folder and a question mark on a grey screen. I think its looking for a disk, hard drive or otherwise, I also get a image of a globe in a grey square, sometimes flashing.
Long before the problems that now make using it impossible, the monitor also developed a solid line of pixels from one side of the other - not dead pixels because they change colour depending on what's on the screen, but a definite line. I don't know if this is indicative of anything.
Anyway, I also ran a hardware test using DW and it said all was normal.
I then ran the hardware test disk that came with the computer and equally, all elements passed. Which was quite a surprise as it did some funny things during testing:
Towards the end of the memory test the screen became a complex mass of multicoloured lines forming grids and squares... the original screen flashed up showing memory passed the test and then I got green vertical lines on black, then orange vertical lines on black, followed by opaque, pale blue-purple, then salmon, then bright blue, then purple.
The original screen flashed up showing the mac had passed the modem test. Then the screen alternated between black and white which changed by the colour moving up the screen from the bottom. Then it was thick black lines on white followed by thick white lines on black. Then the Vid Ram test was complete.
After the hardware test passed I tried installing OS 9 as DW had said the hard drive had been rewritten and now appeared on the desktop.
The OS 9 disk notified me that a valid destination drive could not be found.
I tried DW again and DW couldn't find anything other than itself on the computer either.
Any ideas on where I can go from here?

Answer 1

Have you been hearing a clicking sound. If so, it's the hard drive failing.
First try something simple. Zap PRAM. See Mac PRAM, NVRAM, CUDA/PMU & Battery Tutorial
 Cheers, Tom