You would need to hold option key or 'c' to boot from Leopard.
A really badly damaged drive can prevent booting from any disk, whether CD/DVD or hard drive, because the system still tries to see if there are other systems out there when it scans the various buses for bootable devices.
You probably need to unplug or pull the old drive to do anything. But you may be able to zero the drive. Partitioning checks the blocks where the partition tables will go, because those blocks can't be remapped later, and some drives fail at that point, but re-partitioning, not just erasing the user partition, is something I do frequently.
Is the 2nd drive bay filled? definitely want to use both drive bays.
Got a FW or other emergency boot drive handy? or small partition on a media drive that has just minimal OS X.
When swapping drives on G5s, NVRAM doesn't always 'learn' or see the new drive properly, so best to zap PRAM/NVRAM or reset nvram to clear the device tree and force it to rescan and recognize new devices (PCI, memory, and hard drives).
I would definitely want a working clone/backup and keep Alsoft Disk Warrior on it to repair and do maintenance of your drives on a regular basis to prevent problems from getting worse.
If you need to recover data, pull the drive and later see if Data Rescue II can see any files. You may need to repair the drive. And Apple First Aid comes up short on disk repairs and doesn't do as many tests and repairs as Disk Warrior.
I always keep a backup spare on hand that I can use if a drive goes out.
http://www.shirt-pocket.com/SuperDuper/SuperDuperDescription.html