I will try once more. I cannot explain it more simple than this. If you do not understand the explanation, than I can not help you any further.
Note that this is a procedure that is not certain to work!
If you want to be sure to have a working MacOS9 system in SheepShaver, you should use a regular universal MacOS 9.0 or 9.0.4 install CD, not a Mac-specific install CD or restore CD.
- Setup SheepShaver with a proper ROM file, you apparently did that, because you could boot from the CD.
- Make sure you have created a separate folder to be the shared folder and that in SheepShaverGUI or SheepShaverPrefs "Unix Root" is defined as the path to that shared folder.
- Set in SheepShaverGUI or Prefs "Boot From" to "Any".
- We will start with a fresh volume, so remove earlier volumes (like your MyMac volume) from the Volumes list (and delete the corresponding files from MacOSX).
- Use SheepShaverGUI or SheepShaverPrefs to create a new volume of sufficient size for your needs, preferably 500MB minimum. Be patient, creating the image file may take a while. (Do not use Disk Utility to create the image!)
- Insert the restore CD.
- When the CD is mounted, launch SheepShaver. SheepShaver will boot from the CD.
- Before the desktop will appear, the MacOS system will see the new volume and ask to initialize it. Name the volume (for instance again "MyMac") and choose "Mac OS Extended" for the format.
- On the MacOS desktop you will see from top to bottom the icons of the CD, your volume "MyMac" and the "Unix" icon that will refer to your shared folder.
- On the CD look again for the icon of the image file "Power Mac G4 HD.img" in the "Configurations" folder and double-click that icon.
- The image will now mount on the desktop as volume "Macintosh HD".
- That volume has also a couple of aliases on the desktop, "Browse the internet", "iMovie", etc. You can ignore those.
- Double-click "Macintosh HD", it will open in a window. I do not know the exact content of this "Macintosh HD", but there will be folders "System Folder", "Applications", "Apple Extras", "Internet" and more.
- Drag all folders (and other items if present) from the "Macintosh HD" window onto the icon of "MyMac" volume in order to copy them from "Macintosh HD" to "MyMac". (The content of "Macintosh HD" will thus be copied to "MyMac", not "Macintosh HD" itself as you did before.)
- After copying is finished, open "MyMac" and inspect the content of its window and compare that with the content of the "Macintosh HD" window. Alle items from "Macintosh HD" should now also be in "MyMac".
- Pay special attention to the System Folder in MyMac. It should display its well known special MacOS icon. If it does not, try opening and again closing the System Folder to force it to show its icon (that is the "blessing" I wrote about).
- If everything appears to be OK, shut down SheepShaver.
- Remove the CD
- Launch SheepShaver. It should now start up from "MyMac" if the copied Power Mac G4 system is compatible with SheepShaver.