Is this a tray or slot loading iMac?
I'll assume slot.
I forget what booting into open firmware signifies. :-(
It does seem like a reset situation.
Sometimes if volumes don't appear in Startup Manager (what you get when you hold down the Option key at startup), you need to reset the Mac's PRAM, NVRAM, and Open Firmware. Shut down the Mac, then power it up, and before the screen lights up, quickly hold down the Command, Option, P, and R keys, until the Mac has chimed twice more after the powerup chime. Then, before the screen lights up, hold down Command-Option-O-F until the Open Firmware screen appears. Then enter these lines, pressing Return after each one:
reset-nvram
set-defaults
reset-all
"The reset-all command should restart your Mac. If so, you have successfully reset the Open Firmware settings."
http://support.apple.com/kb/TS1812?viewlocale=en_US
How to eject a cd from the internal cd drive:
eject cd
List of devices:
devalias
List of variables:
printenv
( nvram is the equivalent Mac OS X terminal command. )
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Resetting your Mac's PRAM and NVRAM
http://support.apple.com/kb/HT1379
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reset the PMU
http://mrjcd.com/junk/PMU.jpg
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for slot loaders.
Try holding down the option key then power on. This brings up the startup manager. Click on your cd. Click on right arrow key.
I have ubuntu 6 .6 lts running on my iMac G3 600. there are some video setting to change.
Robert