Glad to hear the Al keyboard's OS specs don't make it a "no-go." Looks like a nifty bit of kit.
The CD is a backup from a friend.
Could be the heart of the problem from the start. And using a friend's disk would be a EULA violation unless that system isn't currently installed on any of his computers.
Tiger (10.4) WILL work on a G3 but your lack of a DVD drive and FireWire ports (for using FW Target Disk Mode to get around the DVD limitation) does present a problem. It's possible to get Tiger on without the DVD drive as illustrated in this article:
http://www.oreillynet.com/mac/blog/2005/05/thecats_mustachesinstalling.html
but it would be easier if your iMac had FireWire. The only part of the article that's incorrect is that the Media Exchange Program expired some time ago.
Panther is still out there with third-party resellers but you have to be careful in buying it. Full retail install disks are black with a big silver X and come on CDs, not DVDs. Gray disks are machine specific restore disks and may not have all the stuff your computer needs, aggravating the whole process. If you order a full retail install set and receive gray disks, send them back.
Before installing OSX (and I mean BEFORE), you have to update the firmware on your iMac to 4.1.9 while still in OS9. The process is relatively simple and full instructions are included with the download here:
http://docs.info.apple.com/article.html?artnum=75130
Failing to do the firmware update before attempting an OSX install can have serious consequences. If the firmware has already been updated the 4.1.9 updater will politely tell you that it's already there.
Allan