@locomoroco, this happened to mine also. the problem is the umd cotroller IC on the mobo got 1 kaki patah.

1. the easiest and cheaper method is inserting a umd in umd drive. any umd should do and a used one also can. mine is fixed this way.
harder method is send to technician, so u have another 2 option

2. taking off all cables for umd utilities. cheap but ur psp cannot read from umds anymore.

3. reballing umd IC. i think this is the most expensive method, but u will have it fixed and u can still use umd.