Can Flame of Anor ready an Istari character even if your deck is empty?

No. Discarding a card from your deck would be considered the "cost" to trigger the effect of readying the Istari character, and costs have to be paid in full to trigger their effects.

Page 18 of the Online Rules Reference:

To

Many card abilities are presented in a “do X to do Y” construct. In such a construct, the “do X” aspect (preceding the word “to”) is considered a cost, and the“do Y” aspect (following the word “to”) is considered an effect.

• If an ability’s cost is not paid, its effect cannot be resolved.