If it spits the disk back out at you, I'm 99% certain you have a bad DVD drive. I used to have 100 PowerMac G5s at my institution and I ended up replacing about 30 of their drives over the course of their thee year life span. They would do exactly what you are describing. Not read, and eventually spit it out.
If you have a PowerBook G4, or MacBook or Pro with a firewire port on it (well, actually if you have another Desktop set up nearby you could use that as well), turn it on and hold the T key in. That will boot the laptop into Target Disk Mode. Connect the two machines via Firewire. You can then put the DVD in the laptop's drive and connect the laptop to the PowerMac and it will be able to install off the laptop drive.