If what I am hearing is correct, you want to replace the optical drive with an iMac caddy and use a 2.5" SSD in it. Your first concern is that the optical drive is PATA rather than SATA. So you need an SATA to PATA optical drive connector. Is that correct?
Tough problem and I don't have an answer but may be able to help some. (Actually I would love to see you get this work so I could do it on my 2008 xserve). OWC does have a connector for converting SATA to full IDE ( used one a couple of years ago to put an SSD into an MDD.
The next problem will be to get the server to recognize it. (I have had great difficulty getting to work with drives other than specialty Apple branded drives. I think your best chance on this would be to contact OWC technical support and see if they think it is even possible. It would be a terrific improvement as a boot drive in a xserve. Please keep us updated as to your progress.
I have not used my 2008 server for a while but if I remember correctly, I was having a hard time taking it above 10.7.5, so it just sits in the rack.