Your Quad 2.5 Power Mac has a DVD drive that could read dual layer discs, and since it's doing a kernel panic on the Server Disc, that would rule out a DVD drive problem, at least to me.
Is that Leopard disc a retail disc? Meaning it's black (retail). If it's gray, which is what the system specific discs are, which will not work with your PM and would eject just like you are experiencing. It shipped with Tiger so there are no Leopard system discs for that machine, any Leopard system discs you might find/buy would be for other Macs and not work.
First I would reseat all of the RAM and try again. Make sure it's all pushed in firmly and the tabs are secured. If that doesn't solve the problem I would start taking RAM out and only leave one matched pair in place and see if you can install Server. (Server is your preferred OS, correct?)
Kernel panics indicate a hardware failure. Most of the time it's RAM. either it's badly seated and can be pushed back into place or one stick or more has failed (or even a RAM slot has gone bad). Take all of the RAM out but one set. Try it, it if doesn't work, replace that RAM with some of the other RAM and keep note of what's what. Keep the matched pairs together.
If you can't solve the problem with the RAM, it's likely a different piece of hardware. It could be the hard drive, the logic board, the power supply, etc.
Check to make sure all of the cables are firmly seated on both ends.