The following paragraph tells you how I solved a similar problem, but I
would call Power Computing Tech support rather than following my memory of
this event- I don't want to feel responsible for futher destroying your
system software.

I upgraded a friends Umax and neglected to follow the instructions for
preping the CD driver first.  The third party CD player that UMAX uses is
not supported by apple.  OS8, however, installs the apple driver over the
third party driver and won't allow you to start from a CD.  If I recall,
the system just hangs when loading the system software and calling out to
the cd player.  You should have luck starting from your original system
7.5.3 software by holding down "c" on sturtup.  You can then open your
extensions folder from "Previous System Software" and drag the original
Power Computing CD and/or HD driver into the new extensions folder and
taking out the offending apple driver.  Then open your extensions manager
and select the system software setting i.e. all unnecessary extensions
off, duplicate and rename it, then check off your old cd driver on the
new extensions manager setting- restart and continue your upgrade.
I don't know about Power Computing support, but UMAX was excellent, and I
would recommend calling your PowerComp support line before calling apple-
they can talk you through it- probably the easiest solution since my above
recommendations are based on fading memories and may not be 100% accurate.

Good luck,
Graham Johnson

Medical Illustrator
The Salk Institute
La Jolla, CA