3.1 binaries just don't on a 2.0 boot.img cos the are DRMed differently.

1st think you should check wether your kbd just fails at stopping autoboot or wether it's completly useless in the OpenFirmWare-promt.

Disconnect your HD and start the Peg.

If your kbd does work you may continue below.
If it doesn't, get another one cos continuing has a high chance of turning your puter non-bootable.

Options:
- edit the OF-ENVs to make the CD the primary boot-device (see manual)
- edit the OF-ENVs to make autoboot fail and than manually boot from CD
- tricky one ..... replace the 2.7 boot.img with the one from the 3.1 CD
not 100% sure wether a 3.1 boot.img will run 2.7 binaries, but if it does you should be able to start the 3.1 iWizard.
if it doesn't, better have a kbd that is working in the OF-prompt

[ Edited by Kronos 27.03.2013 - 22:27 ]