A directory issue alone could lead to the hard drive being invisible. That does not mean the drive is dead.
Horizontal lines though are not a good sign for the inverter board or the graphics driver of the Mac OS 9 booted CD. If the CD is not a retail installer CD newer than the Mac in question, or has a Mac model name on it, the horizontal lines simply indicate you booted from a CD with the wrong graphics drivers.
Has the clock battery been replaced in the last 4 years?
Does your Mac OS 9 installer disc look like
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Message was edited by: a brody