I think you will have to search around to see if it supports large volumes, this post claims it can't but that may be an issue with OS 9…
firmware update for g4 agp 400
I'm not sure if the 500 is the same as the 400.
You may be able to use the disk if it is partitioned to smaller sizes, but I would expect booting to fail, so I don't know what is going on for you.
I think you need to spend some time running a known good OS - e.g. an install CD that is in good order. If the Mac dies with that system you know the hardware needs testing or remove parts to see if the issue ceases.
There should be panic logs you can view (see earlier link) safe mode & verbose mode may give you info too. It's around 15 years old - when was it last used, do you know if it was unstable? Single user mode should allow you to repair any disk corruption after a failed shutdown unless the disk is in a very bad state.
Try safe mode if your Mac doesn't finish starting up - Apple ...
How to start up your Mac in single-user or verbose mode - Apple Support
This cropped up in search, looks useful for the troubleshooting guide…
http://www.scribd.com/doc/55669677/Power-Mac-G4-AGP-Graphics