There is a fair chance the RAM on the logic board is defective
yet reports it still is a 512MB capacity piece(s) of RAM. And the
items you see on the logic board likely is the factory RAM.
The 'gray box' instructions to restart the computer would be
a Kernel Panic notice; and bad RAM is one of a few causes
of that kind of notice. The other, closely related, indicates a
bad logic board; however the suspect RAM lives there, too.
Whether or not the iBook could still chime, with primary RAM
on the logic board somehow disabled, is not something I am
equipped to answer. But it could be contributing to this issue.
And I am not sure how difficult or practical it may be to attempt
to find out what kind of replacement chips could take the place
of the failed? part(s) on the logic board. Some top-notch repair
companies offer re-soldering services and have modern work-
stations that do multiple solders on logic boards; so one of them
may be worth contacting, in regard to this kind of repair. They
could want to see the computer intact, to try & diagnose it.
However some would put this kind of fee into a quote to repair;
while some may choose to test the unit and get back to you on
the quote. So if it seemed too high, you're not out money. I'd
contact a few repair professionals to see what their story is.
{Too bad you're far away from South Carolina, as wegenermedia
.com there has the modern facilities to fix logic boards, & Macs.}
The default soldered-in RAM likely has to work before the second
slot registers to be considered enough RAM to boot the iBook. Yet
there may be something else also amiss in this old iBook.
So, I don't think I have much more to say about this...
Good luck & happy computing! 🙂