
Ps: Sorry for lack of images during the process. Hope if helps, the process of creating USB drive of 10.4, 10.5 etc. Click continue, and it should be installed.Make sure the format is selected as "OSX Extended (Journaled)". Select your hard drive, and click options.Proceed the installation by clicking continue.You should be greeted with the welcome screen.You should be able to boot from the USB drive.In order to boot from your drive, type boot ud:,\\:tbxi.On the bottom of response from the command in step 2 you will see a drive named ud.Boot/Restart your iMac with "CMD+OPTION+O+F" keys pressed.Select mounted DMG file (not the file itself the mounted image) as the source.Open up the Disk Utility again, this time select the partition you have created in step 5.

Mount the dmg file of the Mac OSX installation (you can copy from the installation disk or download it from internet.).Click the lock again in order to save the change you have just made.Uncheck the setting "Ignore ownership on this volume".Click the lock and enter your password.Go to "Sharing and Permissions" section of poped up window.When it finishes, right click on mounted drive and select get info.(This will delete everything on the thumb-drive, thus make sure that you don't have anything valuable within the USB drive.) Select "OSX Extended (Journaled) as your disk format and hit erase.Select your drive and go to erase section.Insert it into the USB port of your computer.Find an USB drive, with 8gb or more storage.I am gonna continue this answer with the assumption of you have a disk image of either 10.4 or 10.5, as well as your mac is currently working or you have access to another mac since you have mentioned you downloaded the disk image in question itself. However, if I recall right, iMac G5 is capable of running 10.5 Leopard as well. You can use an USB drive for the reinstallation of Mac OS 10.4. Probably the medium you have inserted is not bootable by your computer.
