Sounds like replacing the DVD writer drive would be worth a shot, quite a few issues going on there. I have not found a source for original drives other than used units which I would not recommend.
You may want to substitute the DVDdrive to point you in the right direction. WalMart sells an internal22x LITEON
DVD Writer for $39, Bar Code 44149 00406 (others may not be IDE) that you can test or permanently repair with.
To test, unplug your ilo and simply:
1.Set the new 22x drive to MASTER (comes set as slave out of box, seetheir documentation or the drives cover switch legend markings).
2. If you wish to play commercial DVD's in your ilo, you must first install this DVD writer in a PC and play part of a commercial DVD. This will set the units Region Code. If you don't do this, the drive will not play commercial DVD's (it will not start or it will lock after copyright screens). If you don't wish to play commercial DVD's in your player, you don't have to do this step... it will play DVD's it creates just fine without it.
3. Take off the top of the ilo and move the flat data cable
and the power connector to the new 22x drive.
4. Re-test all your issues. If your problems go away then you need the new drive. If not, the only other user action I can think of short of making sure all the cables are tight is to reload the firmware (http://www.ilohelp.com./download2.htm).
The new 22x drive can beinstalled in the ilo and, with some work, look just like the originalfrom the outside. Some other posts also say you can open a hole in thetop or back cover for the cables to exit and just leave the new drive on top ofthe ilo. Not crazy about that option but up to you.
Hope this helps. Good luck!