First thing I would do (if you haven’t yet) would be the parameter RAM reset. At boot, hold down +P+R.
Otherwise, it sounds like the system drive went bye-bye.
Also, take that system drive from the Xserve and see if is readable on another system. I don’t even know what the Xserve has… ATA? SATA?
Like Bob says, it’s old tech. If you have to get it running to keep going, good luck, but the new stuff should be much better.