It's not over yet. You do have options, just down give up. I've fixed this problem several times.
Apple notebooks are extremely bipolar. Sometimes a disk inside the drive will prevent you from booting in TDM or resetting the PRAM and as crazy as it sounds, a faulty hard drive can prevent you from booting to CD.
I've taken a macbook, and put it into target disk mode and have it not show in the finder or disk utility on one mac, but show up on another mac. Sometimes, you'll have to repeatedly try combinations or Relaunching the finder, restarting the computer in TDM, unplugging and replugging in the FireWire cable and resetting the PRAM and PMU.
Sometimes one OSX disk won't help you while another will. Having multiple computers, multiple disks and an external enclosure is your best shot. With patience, you'll should be able to figure something out.
Last time this happened to me on a macbook, i pulled the drive and popped it in my G5, copied off the data, reformatted the drive (zeroed out), popped it back in my macbook, reinstalled the os and coped my data back in TDM.
I'd say the fist thing you want to do is pull the drive and try to get your data