The weird thing is I was able to erase the drive through DU....not sure why I can't write on to a "clean" drive and install Panther.
May be a bad installation DVD. What error are you getting and at what point during the install attempt does the error come up? Does it ever get to the "writing files to disk" point or something like that?
You can test the HD first though. First re-partition it. Choose the whole disk in DU, then go to the Partition tab. Under Volume Scheme choose 1 Partition. Click Options and make sure Apple Partition Map is chosen, click OK. In the main window choose Mac OS Extended journaled. Click Apply.
Next choose Erase again, and click Security Options, choose Zero out Data to make it write one pass of zeroes to the disk, Click OK, make sure Mac OS Extended journaled is chosen, then click Erase. It will take a while to write to the whole disk.
If you still can't install 10.3 then it's probably the install DVD that's gone bad or is scratched.