You could also ask an independent authorized Apple service provider the fee or minimum
shop rate for them to remove the hard drive, so you could deal with it separately; then if
they want the computer, you could gift it to them for parts or perhaps repair. It would be
most likely to be re-used or in part, directly recycled as a computer that way...
Or use the iFixit.com guide to remove the hard drive from the failed computer.
Given the iMac G5 series were among some products that had issue with power supplies
and capacitor failures, it may be something that an experienced hobbyist could repair/use.
You could attach a universal USB wire kit to the bare hard disk drive and connect it to a
healthy computer, to then see about erasing the hard drive by use of disk utility in an OS.
An example of such a universal drive adapter for USB to connect a bare drive to a computer,
is this model; there are others and should be available at most quality computer stores:
http://eshop.macsales.com/item/NewerTech/U3NVSPATA/
In any event... Good luck! 🙂