Hi all, I just joined this forum because i have an exactly the same issue but on a Powerbook G4 1.67Ghz.
Description of the problem:
Well one of the days one of the Powerbook G4's decided to crap out and the DVD/CD drive stopped being recognized in the computer. This computer has a Toshiba 80 GB hard drive (there is a reason to why I said the hard drive type, I will tell you below

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When I go to the System Profiler and look at Disc Burning it says "No burning device was found. If you are using an external device please make sure that it is connected and powered properly"
The CD drive will take CD/DvD's, they spin up and slow down, but will not eject them. Pressing the eject key in OS 10 doesn't do anything, not even if you press the mouse button on boot, pressing "c" on boot doesn't work, pressing the "option" key while booting doesn't find it either.
I have another 1.67Ghz Powerbook G4, it is a fully working one. This computer has a 60GB hard drive, I believe a Toshiba also.
What I did:
So I took both of the computer apart and took the Hard drive from laptop B, and put in in laptop A.
Start up the first laptop and the CD drive is being detected by OS 10. Fully working, ejects the CD on boot and in OS 10.
I take the hard drive from laptop A and put it in laptop B and the darnest thing happens, the CD drive doesn't work anymore!!!
I put in a Mac reinstall disc and try to boot from it, but the laptop doesn't recognize it, and I can't get the CD out.
So I unplug the hard drive from the computer and boot it up, since there is no hard drive it goes to boot from the CD and boots into the window were you can reinstall OS 10.
So whats going on?
It seems like this 80GB Toshiba hard drive is the reason the CD drive is not working! So just to make sure, I took the original 60GB hard drive and put it back, and the CD drive is working fine again.
I have another 60GB HD laying around, it's a HITACHI TravelStar, its a normal Windows HD, doesn't have any Mac logos like the other two had. I tried to use it. Had to format and install the OS via Firewire and still nothing!
So what my guess is, the working hard drive has some kind of special firmware on it, or some kind of a water mark that just lets it work. I guess it might be another way to keep people from installing new Hard Drives...
I hope mantis15 is having the same issue, so that we could hit 2 birds with one stone.
Please ask me questions or for details I will try to do my best to answer them or give you that information.