It sounds to me like your optical drive has failed as your symptoms mimic what mine did when it went.
One thing you can try before buying a new drive is removing your old one and re-seating it a couple of times to see if maybe the connector on the drive just isn't seated right. This is unlikely but worth a shot.
You can replace the drive with a variety of different types, for instance this blu ray burner from LG would work:
http://www.newegg.com/Product/Product.aspx?Item=N82E16827136263There are cheaper options available on Newegg if you don't desire a blu-ray burner. It just needs to be of the 'slim' variety. (Stuff that will work will look similar to the product I linked.)
Good luck!
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