OS X Server is installing!
Switching the cables seems to work for now, albeit with some caveats:
1) Boot time is slow. I wait, I get the blinking system folder/question mark for a while. Then it sits on the system folder, then it boots. Normally I wouldn't see any of that.
2) I can't boot from CD by holding down C as it will just sit there forever on a grey screen. Instead I have to let it boot into MacOS and pick the CD in the Startup Disk panel. I also don't know what speed this disk is running at yet, but I'll find out later. Hell the SCSI disk benched at 12mb/sec so it has to be better than that.
Something I did notice was that in one of the initial stages of setup, OSXS wrote it's boot info into OF. Now when it reboots it starts up from the hard disk straight away, so perhaps the key to the boot delay is in there.
I'm not going to call this a complete victory as I'd like to get to the bottom of the IDE mystery so I can get it working properly. But I have finally gotten OSXS installed and I got to dabble a little with SCSI along the way too.