Target mode and networking are two separate things. I have never tried "firewire networking," so can't comment, but I have successfully mounted many G4s on various laptops, with the G4 running OS 9 and laptop running OS X 10.2, for example, so I don't believe it has anything to do with the OS.
It may, however, be an Intel quirk.
I would turn off networking on both machines, then boot the G4 with the T key held down. Do you get a yellow/orange firewire symbol dancing around the screen? If not, something else is wrong and target mode will not work. The G4 has to use its built-in firewire port -- no PCI card or add-on.
If the symbol is displayed, look for the G4's HD on your iMac's screen. If it is not there, try rebooting the iMac without changing anything on the G4. For target mode, you should not be trying to connect to server or doing anything other than looking for the G4's HD symbol on your screen.
-dan