Missing Desktop folders and menubar

I'm having difficulties with my PowerMac G5 2ghz duo running os 10.3.9:

When I boot up I get the background image but that's all. All my desktop folders are gone and so is that little menu bar across the top with the time and so forth. Moreover, the mouse cursor is a little spinning colorful pinwheel. It's just spins for hours if I let it.

I've tried booting up from the installer disc, but when I press down on the C key, the G5 just ignores the cd and continues to boot from the HD. I've tried zapping the pram, but that didn't help. I've tried booting up with my finger on the option key, but that didn't help.

Can I get some rescue suggestions...?

Do you using a wireless keyboard?

Do you have another Mac?

I'm using a wacom tablet

well, i'm using a wacom tablet. Would that make a difference?

It might. Try switching to a regular keyboard.