No. The disk image is not damaged. This CD was designed for Education Power Macintosh 5400, 6400, 5500 and 6500 series computers. Although the CD should boot all of these computers without problems, the Disk Tools image on the CD will only boot a Power Macintosh 5500 or 6500 series computer.
If you need a Disk Tools image that will boot your Power Macintosh 5400 or 6400 series computer, you can download the image from all Apple Software Updates locations.
These articles can help you locate the software update mentioned here:
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Where To Find Apple Software Updates" - Lists online services for free Apple software updates.
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Obtaining Apple Product Support in the USA" - Lists 800 numbers and online services for software updates, Apple support information, and a subset of the Apple Tech Info Library.