Yes, it's looking for an OS. Either it didn't find one on the hard disk, or the hard disk isn't working. Either way, the next step is you need a set of Mac OS floppies to go forward.
Mac OS 7.6.1 is the latest that supports the Powerbook 170, but anything from 7.0.1 to 7.6.1 will work. Be aware that some sets are machine specific. For example, I have a set of floppies specific to the Powerbook 180/180c, but it doesn't support the PB170. Machine specific floppy sets are nice because you only need 5 or 6 disks total. If someone has a set they can copy for you, that would be easiest. A complete set of OS 7.6.1 (or 7.5.3 with updates to 7.6.1) is about 20 to 25 floppies for a machine generic set that can boot all Macs. This is what is available for download at the links below.
Apple has all the software you need here:
http://www.info.apple.com/support/oldersoftwarelist.html But, as you said, you don't have another Mac to write the floppies. You might be able to use a program like Transmac. It can read/write/format Mac OS floppies and it's 15 day trial period will get you started. I'm not sure, however, if it will read the .bin files that Apple has up for download, though.
Other useful sites to look at:
MacWindows.com (
http://www.macwindows.com) - They have lists of software and tips for transferring files to/from a Mac and a PC, including links to software like Transmac that can read/write/format Mac floppies.
System 7 Today (
http://main.system7today.com) - which is a little easier to figure out exactly what software you need and download (they have "Ultimate packs" which contain everything you need without all the confusion of Apple's generic FTP site. Plus, they have links for older programs you'll want like Adobe Reader, web browsers, etc. Again, I know, not helpful if you can't write Mac Floppies. But, at least it'll show you what you need.
I saw someone on this forum or elsewhere who was making Mac OS floppy sets for a small fee. If you get desperate I can help you out eventually, just not right now because I'm not setup to make Mac OS floppies at the moment.
Regards,
Mike