Sounds like the drive is just dead. It happened on mine when I first got it. Just get a new one, make sure it's set to master (as roothorick said), and put the cd back in.
If you switched the drive already and it was still giving the "cd-rom error", its likely the drive isn't compatible. Here's a list of known comparable drives:
Compaq 179137-701
LG GDR-8164B (confirmed great for analog mixes)
Lite-On XJ-HD166S
Lite-On LTD-163
Lite-On LTR-40125S
Toshiba XM-5702B
Matsushita CR589B (this is the stock drive; works with analog mixes)
Matsushita SR8589B
MITSUMI CRMC-FX4830T
NEC CDR-1900A
SONY DRU-810A
LG GH22NP20 Multi DVD Rewriter