The Error -127 is an Internal File System error. (likely a bad directory structure)
Boot to your OS 9.x install CD, open the Utilities folder there, and run the Disk First Aid to be more sure of your hard drive. You may find that this will fail. If so, you should find a copy of Norton SystemWorks and repair your files system. Norton is OK for OS 9, but I wouldn't run it on a hard drive with OS X. DiskWarrior may also repair this.
You might end up needing to ERASE the drive (you'll lose everything that's not backed up) to get past this problem. but this would be your LAST resort.