When you put in a bootable cd or dvd, then reboot, will it boot with the disk, or not? Make sure your computer is set in the bios to boot from the dvd drive first.
If it can play the bootable disk, then it isn't a physical problem with the drive. Starting from a bootable disk is outside the operating system, so this is a good test of the drive itself and not the settings within Windows.
If you cannot play a bootable disk in this manner, the drive may be malfunctioning to the point you need to replace it. You haven't changed any physical connections to the drive in any way? And it was working in the past?