No problem installing
TrueCrypt 7.0a a.k.a. 7.0.1
on a PowerPC running Mac OS X 10.5.8 with MacFUSE 2.1.5 (Beta) from
Google Code.

Try:

1. remove MacFUSE
2. restart the OS
3. install MacFUSE
4. update MacFUSE to 2.1.5 (Beta)
5. restart the OS
6. install TrueCrypt.

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