I had the same problem. I had better luck when I booted into OS 9. Inserted the OS X CD. Then I launched the installer program.
Another problem that I had loading onto a PM7500 and a PM 8500 was that the monitor would not come on when it was trying to start up. Moving my internal SCSI cable from the internal fast SCSI connection to the external SCSI connection solved this problem. After making this change the installation was able to continue. On my 7500 I had to try a few times befor I got it to load.