Does any error screen pop-up at all during this?
My NeoGeo CD toploader has been running rough in the past but I fixed it. My problem was probally different, I would get the disc read error sometimes and I noticed that when a disc stops spinning the cd kinda slides on the turn table. I put in rubber adhesive that doesn't have residue and fixed that problem, as for the I/O error, I just simply pulled the turn table up and down a little so the distance is perfect for the lens. I had to use some pliers to do it, made me nervous as hell. The system runs like new now.
Definetly check for the lid being opened or close on the button. If the system is dead, then just buy a CDZ that is in great condition. If you put a cooling fan inside a CDZ or just put it next to the air conditioner vent, it will last forever. I had mine for 6 years, still works like new. Plus you don't get that barring effect in the graphics.