MacBook Pro only boots to grey Apple screen with spinning loader
If you have your original discs load up the Applications Install disc and run the Apple Hardware Test from there. Look for memory faults. I doubt very much you have a firmware "bug", memory failure is much more likely and would explain the unusual hardware behaviour you're experiencing.

I had the same model which I initially bought around 5 years ago, this had the original OS installed (10.5.6). Immediately after purchase I used the install discs to wipe the machine totally clear of the previous owner's setup, no problems encountered during installation. 

Everything seemed to generally work ok (one or two occasional random crashes) until I decided to wipe it clean following the retail release of 10.6. After trying (and failing) several times to install 10.6 I decided to substitute the factory 1GB RAM stick with a 512MB stick from another laptop. This time 10.6 installed perfectly, first go. Faulty memory explained the random crashes as well as the installation issues with 10.6. Incidentally, I tried running the machine after installing 10.6 with its original 1GB RAM. It would sometimes boot but was completely unpredictable - single user mode was always accessible though, like your setup.