Is the ATA bus bad?
I have a iMac G4, 1.25 GHz. The optical drive and hard drive have stopped working, and replacing the hard drive with a new 160 GB drive did not help. When trying to install OSX on the new hard drive, from an external optical drive, Disk Utility does not even see the new hard drive, and System Profiler says there is nothing on the ATA bus.
The computer works fine off of an external hard drive.