Try it with a normal Ditto. I guess you were trying to make it a higher chance of the offspring being shiny? IIRC there's still a huge chance of them being shiny if only one parent is.
EDIT: Hold on, there wasn't a personality value in that Gen, so the only way the game would know if Pokemon were related is the two inherited stats, and seeing as both of those have to be 10 to get a shiny, it does make sense that shinies can't breed.
EDIT: Hold on, there wasn't a personality value in that Gen, so the only way the game would know if Pokemon were related is the two inherited stats, and seeing as both of those have to be 10 to get a shiny, it does make sense that shinies can't breed.