Hi,
I'm actually having more or less the same problem with my Powerbook G4 Aluminum.
When I boot the machine while holding "option", the USB stick is not found.
If I try to boot from Open Firmware, I try "boot usb1/disk@1:,\\grub.img" and the error after quite a long pause is "can't OPEN: usb1/disk@1:,\\grub.img Can't open device or file"
Of course I can't rule out the possibility that I'm using Open Firmware wrong, after some searches of this list and on the Internet I didn't specifically find a description of the boot line and I'm really not an OF wizard.
But there appears to be a drive at /usb@1b/disk@1 and usb1 seems to be aliased to that usb@1b so I think I did it right.
Any ideas that I could try next?
Thanks!
Sam