If your internal drive is dead it likely needs replacing. Have you done that yet?
Sadly, you can't boot up the older PowerPC based systems (G series) under a USB drive, you need to use a FireWire connected drive and the drive needs to have a bootable OS on it for your system.
Depending on the OS version you are working with here you may need an older version or use a boot disk that was created on a G series system as the earlier versions of OS-X had two installs one for PowerPC based systems and the other for Intel based systems.