Burners have two separate lasers, one for DVD and another for CD media. If one of the two fails, the other can still work perfectly. This could explain why your drive works with CD but not with DVDs.
To exclude some sort of software problem, you can run two tests.
1) Install the drive on another computer
2) Try to boot the computer from a DVD. You can use for example a live distribution of Linux to run this test. Sabayon is a good example, but you can get any distribution you like, providing that is burned on a DVD disc
If on another computer the drive works correctly, then there is something wrong in your machine.
If the computer is able to boot from a DVD, then the drive is not damaged, and again there is something wrong in your operative system.
In both cases, the most extreme (but also the most effective) solution is a fresh install of the operative system.