Its only the mac os session on the disk that is borked. and its not even an error thats hard to fix. i got another DR2 image and can try if it works without the error.
you coulve basically used any bootable Mac OS 8 drive/disk to boot your mac. the funky drive swapping isnt needed. Im installing on my 8500 right now without booting Mac OS from the CD at all. i was booted from a small Mac OS parttion of one of the hard drives.