Yep, I'd say that there's something up with the CD-ROM drive. Try another disc or drive if you can. Also, is the OS 9 CD a real one or a burnt copy? Just wondering - I've had trouble booting old Macs from CD-Rs in the past, especially if they're more than a couple of years old.

Also, its not Command-C, its just the C key, though I've had better luck with Cmd-Shift-Option-Delete on pre-G3 Macs. With my machines, as a rule I use Command-Shift-Option-Delete on pre-G3 Macs, and C on G3 onwards Macs with an ATAPI drive.