Hmm. Does this only happen when there's a UMD in the drive? I'm going to post a few things which you can try here in a sec. If you either don't want to try these steps, or try them unsuccessfully, shoot me a PM if you're interested in selling or trading the system. This is pretty long, but here we go:
It sounds like a UMD drive related issue. They can be extremely picky at times.
Generally, your options here are:
1) Make sure your UMD's lens is on-track. (Try this first.)
You can do this by making sure the system's off, popping the battery out, opening the UMD drive door, and *carefully* nudging the lens back and forth a little bit. (You could use a thin plastic pen for example, just nudge one side of the lens a bit.) Ultimately, you want the lens toward the center.
2) Adjust the UMD drive.
This is a little more involved than your first option. Basically you'll need to remove your faceplate, button bar, LCD screen, and metal LCD screen housing to access the motherboard, and the bottom of your UMD lens. On the bottom of the lens PCB, you'll find a small potentiometer.
Using a small jeweler type screwdriver, you'll need to adjust this counter-clockwise in say 1/8th turn increments. Before you do this, mark your original position with a marker or something (as always), and don't go wild. Too much, and you'll burn your laser for sure. I'd say, between 1-3 *small* 1/8th turns is generally safe. Find the sweet spot in there, and make sure you test each adjustment with more than 1 UMD.
3) Replace the UMD drive.
Definitely save this as a last resort.
There's a small risk of breaking part of the (poorly made!) UMD door in the process (very cheap plastic). Anyway, we just need to dismantle the system (to the motherboard level) until we can see the two ribbon cables which connect the UMD's lens assembly. Carefully disconnect both ribbon cables which lead to the lens, then flip the system over so you can see the UMD door.
At this point, you'll need something strong, and thin (tiny flathead works fairly well here): Carefully slide that into the bottom left gap of the UMD door (while it's open), and push the tip of the flathead in to the right, while pulling the door out slightly. This might take a few tries, but you'll feel the lower left side of the door unhook. After that, the right side's pretty easy: Simply slide the flat head's tip in the bottom right gap of the UMD door, and push in (this time to the left, of course), and the door should release.
Finally, remove the metal UMD guide, and the 4 small philips screws from the UMD drive itself. Done!
