It's possible the hard drive is bad, or the volume is bad. Depending on what you're connecting the unit to in target disk mode, if the volume has issues it will not mount or show up at all. Leopard has a tendency to ignore volumes with certain issues. If the drive itself is bad, you'll have the same problem no matter what. If you have a firmware hard drive, install OSX to it from another machine, boot the machine in question and run SMART Utility and see your result.