Also tried installing OS 9 from the iBook, using Target Disk Mode (mounted the Pismo drive on the iBook's desktop), but the installer stalled when checking the disk!
What can I do? The hard disk is working...
Mac OS 9 could be checking (or "accessing") the drive in the same sort of way the installer does when you try to boot from a CD, causing a lock-up. Mac OS X may not do it this way and may be avoiding the problem.
Using Target Disk Mode again, you could try running Disk Utility on the Pismo's drive from the iBook and see if it finds anything. If not, you could take a drastic step and disconnect the HD inside the Pismo and see if it will boot from the CDs. If it does, the problem is with the HD and it may require reformatting.
