You gave a very good description of the problem. Unfortunately no one listened.
Simple answer: you need libdvdcss. There's a kind of encoding that you need that lib to decode and it is not included with VLC or any other freeware, for legal reasons. If you're on (X)Ubuntu, it's as easy as typing "sudo /usr/share/doc/libdvdread4/install-css.sh" . If you don't have libdvdread4, then start with "sudo apt-get install libdvdread4". I don't know what you need to do on WIndoze.
It's a common library, it's just that everyone wants you to install it for legal reasons. On the VLC forum you mentioned just ask about that. And then post my points below as, no doubt, they have been wasting your time as well, rather than say, "I don't know".
So, yeah, given your description of the green, etc., that should have been a very easy thing to suggest. I just had the same problem with a new laptop. Typed the line, Bob's your uncle.
As to all the little "helpers" on this thread, would you please consider the following? I've been writing code since 1978 and the level of professionalism has not improved one iota. You waste peoples' time, destroy their machines and really apparently don't give a damn about it. No? Then start following a few simple rules.
1). People like the poster gave you a lot of information. EVERY ONE OF YOU threw a large amount of it away to spew your wisdumb. "Plays on other machines", so forget about "damaged media". "It plays other DVDs". It's not a "shoddy drive". What's shoddy is your logic.
2). DO NOT EVER TELL ANYONE TO UNINSTALL AND THEN REINSTALL SOMETHING UNLESS YOU KNOW SPECIFICALLY WHY THAT WOULD HELP! It is not an acceptable equivalent for "I don't know". You have destroyed more PCs and wasted more time than you have ever helped with that. And get a real OS where that never helps, like Linux.
3). Suggest the 99 out of 100 before having someone spend a lot of time on the one in a million? Hard drive errrors??? THAT was purely not wanting to say, "I don't know". Do you care how much of peoples' time you are wasting?
4). If you're posting something that is not cut and pasted from a terminal window where you just tried the command, say so. You don't remember it as well as you think you do.
5). When something like this gets answered, stop and ask yourself how it was that you suggested all that other crap instead of what was pretty obvious. Every person that installs VLC and then puts in an MGM or other mega-studio DVD will have exactly the problem described. Should really be the first guess, no? And you're talking about scanning the hard drive... I know you think you deserve some kind of medal for trying to help, but get real and realize that if this is the best you can do, you're not helping anyone except your own ego. Just stop it.