Can't boot from external hard drive

I've made a copy of my Leopard start up disk by making a disk image and stored it in the hard drive. I then double clicked that disk image file and it mounted. I selected all the items in the new box that popped up, and copied them to the ext hard drive which was formatted in the Mac Journaled file system. The idea was to have a bootable disk in case the optical drive conked out. Plus the hope that I could use the disk utilities from that ext boot disk more speedily than if I'd booted off the optical disk itself.

Sure enough, my optical drive died not too long ago. I tried booting from the ext hard drive that contains the original files from the start up DVD, but pressing <option> shows the only bootable OS that displays is the hard drive itself; no icon whatsoever of my ext hard disk. I get the same thing if I use System Preference --> Start Up disk. In other words, although my external hard drive has the files from the original DVD startup disk, it's useless.

What am I doing wrong? The ext hard drive connects to the Macbook with a firewire 400 cable. This is a 2.2 GHz machine.