I just went through a similar issue with my PowerBook G4 15" 1.67Ghz 2GB Ram. In my case, the HDD needed to be replaced as it could not be repaired from the disk utility application. It's a fairly straightforward process to open this model of PowerBook up, and perform a hard drive replacement. There is a terrific guide as to how to do it at
http://www.ifixit.com.