6. Use Carbon Copy Cloner to backup the whole of the Mac to the other volume
This would be fine if it weren't for the fact that the OS on the Mac's starup volume is completely borked, hosed, kaput! OK, then you do a fresh install with Leopard on to the Mac's startup disk, then what? What's the point of the backup? You clone over the borked, hosed backup? If so, what do you have? You have reproduced the same borked, hosed OS. Or, you just keep the backup to extract what's useable from it. But an A&I should preserve all that third-party and user stuff.
I repeat: since there's now an external optical drive (or another Mac in FWTDM) why not just go directly to an A&I? This is what an Archive and Install is meant to do. It is why Apple bothered to make this possible.
Even if it would work, what you are proposing is like trying to leave a house by first piling up all the furniture in front of the door and then climbing out the window. Why not just open the door and walk out?