Don't waste your time migrating everything to a new user. Below are the list of files you need to remove from your user because this is a user related issue not a system wide issue. ~/Library/Safari ~/Library/Preferences/com.apple.Safari remove anything that has com.apple.Safari. (there will probably be 3 or so) ~/Library/Caches restart your computer and it should be fine.

Of course these model have liquid indicators. Apple has been putting LSIs inside their computers for a long time.

You can boot from your LaCie, sometimes it can be tricky on older machines running PPC. First -reset the Open Firmware -Start the computer holding down "command" , "option" , "o" & "f" -when the text shows up type "reset-nvram" press enter -then type "reset-all" press enter The computer will restart, hold down "option" and make sure the LaCie is plugged in to the iBook. You should now see your LaCie as a startup disk. select it and press enter to boot from the drive. ..done & done..

Don't bother with the heatsink or thermal paste. The issue you are having with the computer is related to the fan. The computer is getting too hot and without a fan to cool it down it powers off as a fail safe. If there were an issue with the heatsink or thermal paste you would have gotten an error during the hardware test indicating a bad temp sensor or processor overheating. Also, if you do attempt to replace the thermal paste. (which is not necessary at all) make sure you clean off the old paste on the processors and the heatsink with alcohol wipes before applying the new paste.

Well since you have already opened the computer. Take a look at the diagnostic LEDs. They are located to the right of the RAM. LED #1 • Indicates that the trickle voltage from the power supply has been detected by the main logic board. This LED will remain ON whenever the iMac is connected to a working AC power source. The LED will remain on even when the computer has been shut down or put to sleep. The LED will turn off only if the AC power source is disconnected or the power supply is faulty. LED #2 • Indicates that the main logic board has detected proper power from the power supply when the computer is turned on. This LED will be ON when the computer is turned on and the power supply is working correctly. LED #3 • Indicates that the computer and the video card are communicating. This LED will be ON when the computer is communicating properly with the video card. If LEDs 1 and 2 are ON and you heard the startup sound, but LED 3 is OFF, then the video card might be installed incorrectly or need...

Its the airport card. Below is from your kernel panic log. Kernel loadable modules in backtrace (with dependencies): com.apple.iokit.AppleYukon(1.0.9b6)@0x3bf99000 dependency: com.apple.iokit.IOPCIFamily(2.2)@0x35c22000 dependency: com.apple.iokit.IONetworkingFamily(1.5.1)@0x3be30000 dependency: com.apple.iokit.IOACPIFamily(1.2.0)@0x35c38000 AppleYukon, IOPCIFamily, and IONetworkingFamily all deal with networking from the airport card. This is the reason why "the machine also said that airportcard was not configured!" before all the kernel panics. I just worked on a new MacBook Pro which was having this same problem last week.

Doesn't seem like liquid damage. I have seen this many times, especially in MacBooks. There is a system bad connection between the battery connector and the logic board. On some of the older model MacBook the battery connector would get fried. This would damage both the battery connector and the logic board. I bet if you open the computer and remove the battery connector you will see the corrosion I am talking about. Don't worry this isn't water damage. You can try to clean off the logic board and replace the battery connector but in the past I have had to replace both the battery connector and the logic board.

It is definitely the logic board on the computer. Sorry man. It is the reason you are getting grey line on the apple logo and why you can't boot to an external drive, internal drive or a CD. I am disappointed everyone jumped to conclusions about the hard drive when you clearly stated you were able to read the data off the drive. Also, it wouldn't be the RAM because you hear the BONG!!!! which means the computer has past POST. (power on self test).

It will not work the connections are completely different.

Don't try to install it remotely, it is won't work on your computer. Remote install is only for MacBook Air. USB is fast enough for you to install Mac OS X on it. I would partition the disk and try to install it again. Make sure when it starts to hit the "command + L" to turn on logging so you can see what it fails on if it fails.