It could be a couple of things. A 500 MHz G3 has a bus multiplier of 10X available. So it is possible that you have the Bus Speed set to 55.3 MHz and the multiplier set to 10X and the CPU is actually running at the reported speed.

It is also possible that the utility you used to report the speed is reporting it wrongly. This is not uncommon. Some of the utilities are better at accurately detecting CPU speeds than others.

Try downloading a copy of NewerTech's Gauges package, if you can find it. The CPU speed function (Clockometer) is generally very accurate.