I got the G3 opened up fine and hooked up the drive okay, but upon startup I got the same gray screen on the G3 with the beeps.
Do you not have a regular drive in the G3 to which it will boot even with the defective drive in there?
The next step seems to be Limnos' suggestion of physically moving the platters, but my wife suggested I ask the local Apple Store first so I'll try that.
The techs. there will faint, having been trained that you never, never, never, ever open a hard drive. My reasoning was it was gone anyway so I couldn't do any worse to it. There's also an article with methods for dealing with stiction [here|http://www.iswamp.com/data-recovery/hard-drive-stiction-and-data-recovery -10.php].
I suggest you do a web search for "hard drive beeps". There's lots of information out there like [this|http://www.macintouch.com/maxtor.html]. As if you didn't know, your drive is failing. The beeping isn't electronic but probably made from something like metal-against-metal. I don't know if my spinning trick will work if it isn't simply dirt causing stiction but something out of alignment or broken. I spent a while browsing my search results and see lots of theories and symptoms, but no solid diagnoses or treatments. Gotta get ready for a trip so I'll leave the research up to you. 😉