PSP UMD Repair: Not reading UMD discs
 

I have seen many PSP's stop reading UMD discs and for the most part they are repairable with the least amount of opening your PSP.
First we will do some trouble shooting with what might be wrong with your PSP unit.

About 35% of the time I find that there is something stuck in the UMD gear. It is different every time, sometimes its a piece of dust, plastic, soda, and even hair.
Another 25% is the Disc Spinning motor. This will not let The disc in the UMD spin.
About 20% is the Laser motor, this might be hard to spot since it could be something in the gears.
About 10% is the actual laser itself. It will not focus the laser to read the UMD disc.
The Last 10% is the Motherboard. This is the worst outcome, since there is very little what we can do but replace the motherboard.

So first what we need to do is find out what is actually wrong with your PSP.

With your PSP in hand.
Turn on your PSP and remove any UMD that might be in there now.
If you open up the UMD door and look down inside you will see the Laser assembly.

If you look to the left there is a black tab that sticks up, this tells the PSP that there is a UMD in the drive.

If you press this down with a small probe, you should see the disc motor spin and the laser light up red
 *** CAUTION DO NOT STARE DIRECTLY AT THE LASER ***
 

If the Motor is not spinning.  is it moving slightly? Maybe a little twitch?
I would lean more towards the bad motor problem BUT would not say for sure, I would recommend that you take the parts out and see if there is another problem also.

If the laser is not lighting up then it could be the laser, I would try and check the cables to the PSP and see if there is a bad connection.

If both are running well then lets put a disc in and get your ear up close so you can hear what is going on in there.
On a working PSP you will hear the disc start to spin up, then you can hear the laser start to twitch, followed by the laser motor moving the laser down the rails.

Can you hear the disc spin up? If not I would take the disc out again and press the switch with your probe again.  if the disc motor is spinning again, look around to see if the metal housing is obstructing the disc when you put it in.. there could be to much pressure for the disc to spin freely.

Can you hear the Laser focus? This might be hard to hear it will sound like a little tick. If you cant hear it tick I would move on and inspect this internally  later.

Can you hear the Laser move down the rail? This will be a smooth sound of the gears, it should not be a really clicky sound.
If you can't hear it move down the track OR it is very clicky follow this.
 

After this try and see if it is reading UMD again.

This fixes it about 35% of the time.

If none of this is working, it is time to open your PSP unit Or send it in for repair.

If you know what's wrong you can replace the problem here

Replace UMD Assembly

Replace UMD Disc Motor

Replace UMD Laser Motor

Replace PSP Motherboard