Except for the quite useless port of Come Back 64 which doesn't even support disk images, I don't know about any other way to run C64 software on the PPC.
In my opinion, the C64 is absolutely predestined for being emulated: lots of great software (think of Maniac Mansion!), the disk images are small, it has nice graphics and sound (I LOVE it

I found which has already been ported to many systems including EPOC; sources are also available.
Perhaps somebody could give it a try, since my programming skills end with Visual Basic.