I think the version of 8.0 that shipped with the original iMacs was specially customised for the iMac, which is probably why it doesn't work - 9.1 would seem the obvious choice for that Mac anyway if you have a copy you can use, it sounds like it's a nice specification. If the Zip is Scsi you could try holding Cmd+Option+Shift+Delete+Scsi ID number at startup. I also found something that said holding Option on startup will make "some Macs with Zip drives" boot from it.
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Main system: custom C2D 2.66GHz tower/4GB RAM/2600XT 512 MB/500GB HD/XP Pro x86+Vista Business x64
Main Mac: Beige G3 minitower (Sonnet G4 500MHz/640 MB DVD/USB/Radeon 32 MB/OS 9.2.2+10.4.11)