What is your primary computer, the one you are using to post here? Is it a Mac? If so, do you have a away to connect that hard drive to that more recent Mac, using an external drive enclosure, or a USB to IDE/ATA adapter like this
http://eshop.macsales.com/item/NewerTech/U3NVSPATA/
You could then test it, and set it up with the appropriate initialization to work in that old iMac. There are some peculiarities for using a hard drive with a tray-loader iMac G3. For example, to work properly in a tray-loader iMac G3, a hard drive larger than 8GB needs to be partitioned so that the first partition fits within the first 8GB of drive space (7.5GB is a safe setting to use). This is a limitation of the IDE controller used in that iMac; only the first 8GB of drive space is accessible during the startup sequence. Install the OS on that first partition. After startup (when the full OS takes over), the rest of the drive is accessible, so the second partition can be the rest of the drive space (up to 128GB total).
You should be able to see the drive in Disk Utility, when you start up from the 10.3 installation disc. But maybe there is something about its current setup, like partition scheme, that the old version of Disk Utility cannot handle. The eBay description sounds like the drive was tested on a Windows PC, so it is currently set up for Windows. If you can "reinitialize" it on a more recent Mac, it should be set up with Scheme set to Apple Partition Map (not the default GUID Partition Table). Format should be the default OS X Extended (Journaled).
If you are able to get the drive recognized by the 10.3 installation disc Disk Utility, you can then re-partition it there, so that the first partition is about 7.5GB. You should do this with the old Disk Utility, if you want to be able to boot the iMac directly into Mac OS 9 (and earlier), because you need to install the Mac OS 9 driver. Using Disk Utility on a more recent Mac does not install the Mac OS 9 driver, making the drive not accessible to Mac OS 9 (and earlier).