Problems with iMac G4 (circa 2001?), boot hangs up

This is the iMac that looks like it has a lamp base and the positionable flat 15" screen.
It all started with lots of "spinning beach balls" (the cursor showing that its working on it) as the Mac was taking much too long with simple tasks.
I was trying to get to perform better.  First, I though I should upgrade the OS from 10.2 to 10.3 (Panther.)  In the course of doing that, the hard drive apparently ate itself, even though the software upgrade reported a successful upgrade.
Upon reboot, the drive was never to be seen again (except masquerading as an empty 2 terabyte drive.)  Sent it to Data Recovery for $100 upon user's request for her music and photos (I backed up business essentials) and even they couldn't save anything without another $2000 and no guarantee.

OK. I tell them to get a new computer.  Meanwhile I want to restore this iMac for simple administrative tasks. Buy a new compatible drive for it.  I successfully extract and replace hard drive (not easy).

Now new drive.  I successfully install OSX 10.1 from original iMac install CD.  Booting fine, working fine.  Now for the upgrading up to 10.3 again.  Errors reported while trying to do from it from upgrade CD.  Maybe the jump from 10.1 to 10.3 too large.
I get on the net with IE (apparently 10.1 didn't come with Safari).  Successfully look at default apple page.  Go to the apple download page. . . and a never ending "spinning beach ball."  Not responding to Force Quit, I reboot.  Now it's stuck again.  It chimes with reboot, then then the small smiling Mac image and the spinning beach ball as it hangs up during every reboot and stays hung up.
I can't even get it to boot off CD now.
What's corrupting these processes?  It would be a great computer for the front desk of the studio.  Not quite willing to give up on it yet, with all the work put in on it.

Any Ideas?