OS3.9 Install does not need a working system at all. You can install 3.9 directly to a blank partition.
All you should need is an IDE driver (already in your 3.1 Boot ROM) to read the disk. You shouldn't need anything else.
If you can't open the CD and run the Installer with no hard disk at all, then the drive must be unable to read the CD properly for some reason.
I'd try reading the CD on another machine, try another drive, etc. What about moving the drive from slave to master and trying again?
tony