I've got the exact same problem as you only without the three year warranty. I need to do a complete system rebuild on this machine and I'm scared to death I won't be able to because of the CD issue. I've not been able to find replacement CD drives on the web anywhere either.
If you find out what the problem is, will you please let me know?
I have an HP Pavilion XH365. I bought it with extended warranty (thank goodness) 3 years ago. It has been back to the shop three times for CD/DVD problems. The first two times I sent it in because the CD drive was unreliable, the second because it wouldn't even recognize much less play CD's (still played DVD's). This last time they agreed to replace it, but who knows if they really did.
When the laptop came back this time, the drive worked for about 2 weeks. Now it is intermittent again--it either doesn't recognize CD's, or will start installing the program only to stop halfway thru and claim that there is either no disk in the drive, or that the disk is in an unusable format.
What makes this tricky is that I also upgraded from Windows ME to Windows XP Pro in the last week. I downloaded HP's DVD upgrade patch for XP, and with the upgrade the drive has worked fine all week on both CD's and DVD's. I've been reinstalling my programs. Now that the drive is fading in and out again, I don't know if I'm still dealing with the original drive & it's acting up again, if the drive was replaced with a defective drive, or if there is a software/driver conflict going on. Any suggestions on how to isolate this? I'm desperate here!:)
And if I have to send the laptop in again, how can I tell if they really replaced it or just jiggled it til something seemed to work again, however temporarily?