this is a serious step, but try reinstalling a fresh OS copy. if you don't wanna lose the current setting, load the new copy as a dual boot option. and then reinstall windvd and try playing the DVD. If it still doesn't, it is definitely a hardware issue.

BTW, before all this, you might wanna see if the drive is able to read the DVD by browsing to windows explorer. If you are able to copy files on the DVD to the hard drive, then there is hope. if not, i'd doubt if the fresh OS install would give you and good results.

good luck.