There are several reasons why a mac won't appear on another mac in firewire target disk mode. (which I like to abbreviate FWTDM)
1) bad cable / loose connection
2) bad firewire port on either end
3) hard drive not posting on targeted machine / loose connection
4) io errors on hard drive of targeted machine
5) directory errors on targeted hard drive
#1-2 will cause the other computer to not show up in apple system profiler on the other mac, in the firewire section.
#3 you will see the computer listed in apple system profiler, but will see no hard drive in the list below the computer, you will only see "target mode" iirc with nothing below it. Usually dead (clicking immediately?) hard drive
#4 is easy to spot, the firewire symbol stops moving, or stalls for periods of time. the speed at which the symbol moves may change depending on activity, but it should not just stop for say, 30 sec. It can prevent disk utility from fully launching, or apple system profiler from displaying its list. (or either, with significant delay) Failing hard drive, often starts clicking or cycling after you try to access it, at which point the FWTDM symbol stops moving.
#5 can cause system profiler to stall, but always causes disk utility to stall when opened. it will open the window but not list any drives. this can last a period of time before it gives up, or it may not release until you unplug the firewire cable. (or maybe not even then!) you can open activity monitor and show all processes, sort by process id, and look for any process with "fsck" or "mount" near/at the top as the numerically largest process. If either is stalled, disk utility will stall when trying to list the drives. The most basic thing you can do is just try to wait it out.
Number 5 is the most common. If mount is hung, it's usually not going to recover. if fsck is at work, activity monitor will usually show slow continuous disk i/o. It will eventually stop the disk activity, at which time it will either give up and tell you that it can't fix it, or it will just stall indefinitely until you pull the fw cable. fsck has been seen to run for 25+ minutes and finally complete, but usually 1/2 hr in is well time to give up on it. Sometimes fsck or mount remains hung after the cable is pulled and you will have to reboot the computer. (sometimes force power down!) mount is very capable of kernel blocking.
If mount or fsck stalls and does not recover, (#5) you have a few options. One is to boot something that will nerf fsck and mount and allow tools to access the hard drive. (disk warrior CD for example) Another is to move/rename those (/sbin/) before attaching the drive so disk utility can have a crack at it. (that's what I do, remember to undo that before running the repair tools) Or if the drive boots still, run disk utility while booted from it, since it's already got the drive mounted. Odds of that being able to fix the problem though are very low. It's worth noting that booting off your restore disc is very unlikely to help because it's running the same or older versions of mount and fsck and will probably have the same problem.
Disk warrior is almost always your best bet for #5, but there have been occasions where DW would get an "unexpected error" and not let me preview it, and I ended up disabling fsck but not mount, and got the "could not repair, mounted read-only" from os x which allowed me to save the data.
Dealing with problem hard drives is an Art.
