Actually, from my experience, reseat the ROMs first. It takes about 30 seconds and can save you a lot of headaches. My Classic has had the same issue. The ROM contacts had oxidized just a wee bit. It would show the blinking floppy disk but with alot of garbage and screen artifacts on the screen. So, the ROM can be causing that. I've also gotten the Sad Mac from it due to that.

Try reseating the ROMs.