Sax,
I Googled for "ata4/1/2" and came up with this interesting doc:
http://docs.info.apple.com/article.html?artnum=58706
I would imagine it is the same issue but I just don't know; the Pismo is not mentioned, but you are probably running a very similar AHT v1.0 and this issue seems more than just a coincidence.
I don't know how you test for the problem you are experiencing. Since the HD appears to operate normally in an external enclosure, that leaves the HD ribbon cable and the logic board as potential culprits. All I can suggest is to examine the ribbon cable very carefully, checking each trace visually. However, even a positive visual inspection does not necessarily mean the cable is good.
I know of no test for the IDE controller on the logic board for us poor users, and a bad controller means a replacement logic board.
If you wanted to try another HD ribbon cable, used cables are not very expensive:
http://www.ifixit.com/PowerBook-Parts/G3-Pismo-Hard-Drive-Bracket/IF106-001
I have read on these forums of failures of both the ribbon cable and logic board on the Pismo, so it is a crapshoot picking the offender.