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And double check that the partition scheme isn't MBR (which it won't be) or GUID (since it's not an Intel), but Apple Partition Map - otherwise it's not bootable. Also, external drives (at least up through 10.4.9) could only be booted if they were firewire, not USB. I'm sure Dave could confirm this as well.
Confirm the partition scheme in Disk Utility. If its the wrong one, then you need to highlight the disk (not the partition) and choose the partition tab on the right, choose "Options..." and select the Apple Partition Map. Hit OK and Apply. This will, of course, wipe the disk clean but it will have the correct partition scheme for you.
Just a thought.
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