That doesn't sound like a good development.
Could be a symptom of a failing logic board...try the Tech Rescue CD (do you mean TechTool?) again. If it happens with that, then I suspect the iBook is toast. If it doesn't, well...unless this is an intermittent issue, it could still be the HD.
You do need to find something else to start up from that you KNOW is likely to work if the iBook's problem is just a failed/failing drive. If you're not sure the disks you tried were the system disks, pop them into another Mac and see what they are.