It sounds like you have expertise to find solutions, checking with this world of expertise. I may state the obvious, but if you flash with media in the drive you can create problems - if that's possible, re-flash the drive in safe mode without media. Also, see if MS default IDE drivers serve you better - I see that making a difference for others here. Beyond those two things, and possible a drift backward to "P9" firmware, it does sound like you have the rare errant drive. IOMega has been good to me for returning drives in the past, so give them a chance to serve you right.
With a nod to socrates007, I certainly don't want to join any arguments, and I'm not familiar with the threads and history just mentioned - that is what it is.
I will say I'm in agreement that one can get a lemon from a competent manufacturer. I myself went through 3 CD rewiters from mysterious failures, all seemingly related to laser failure, which I thought was caused by some RW media (as implausible as it sounds - it just seemed that using a certain CD RW media would cause certain drive failure). Phillips and Memorex were kind enough to RMA for me, and I finally got a dependable drive that's been stable for almost 2 years now.
My own BenQ rebadge is from the holidays 2004, so it's too new to yet know if mine is stable, but so far it's been a charmed device. Based on previous experience, though, I'm watching it carefully, keeping within warranty limitations (no crossflashing) and such until the drive is at least 4 months old (or more).
Now, mechanical "clanks" and "ticks" are simply not acceptable, and the first I've read about so far here. That deserves quick action.
Strange RW behaviour is a bit difficult to pin down, though - unless you can use another drive to "prove" the media is still fine. Failure to recognize media is serious - if there's another computer the drive can be tested in, I'd give that a try too. There can be odd combinations of chipsets/drivers/firmware that combine toward failure - you can be among the first on the planet to find that combination.
In any case, you deserve to get what you paid for, and any competent manufacturer will want a chance to correct a problem under warranty. If you ordered a medium steak and they served it rare, you'd have that fixed wouldn't you? If the service staff acted like it was your fault, you'd probably never go back again. I certainly wouldn't.