Superdrive won't read DVDs since I installed Lion

Question

Long story short - My hard drive died a few weeks ago. Everything was backed up on a Time Capsule. After installing a new hard drive, I went through and install each OSX I have had before transferring over my data and applications. I have a Macbook Pro Mid 2009 (came with Leopard). So, I went through, updated to Snow Leopard then Lion, then transferred over my data.
1. I bought a game recently. All the specs fit for my computer. Put it in my SuperDrive and it would neither mount nor be recognized by the computer. My computer said it was a blank disc and spit it out after spinning it around for 5 minutes. I tested the game disc on another computer (my brother's Windows one) and it worked fine.
2. After transferring my data over, my Adobe CS3 was having problems opening. I recieved a few messages about problems with the licenses and figured I would have to uninstall everything and reinstall everything. (Tried the license repair tool from Adobe too, couldn't get it to work). So I uninstalled everything I had from Adobe (using Adobe's uninstaller). I inserted the disc to be reinstalled and had the same problems. The disc kept spinning, wouldnt mount, and my computer said the disc was blank.
I have tested burned discs and film DVDs. All of them seem to work. I am just having issues with installation DVDs it seems. I have also tried mounting them in Toast Titanium and I can't get that to work either.
I took my computer to the Apple store, they said they could replace the drive or do testing on it for 5 days. I can't really afford to be with my computer for that extended amount of time right now nor do I want to drop $100 when this could be a software or firmware issue. My questions are:
1. Will upgrading to Mountain Lion fix or make this issue worse?
2. Are there any diagnostic tools I can run besides the AHT to find out if my drive is going to ****?
3. Are there any software related things I can do to get my discs installed? (IE Installation over a network, using ISOs ->which I tried with the game, couldnt get that to work).
Thank you!

Answer 1

Please read this whole message before doing anything.
This procedure is a diagnostic test. It’s unlikely to solve your problem. Don’t be disappointed when you find that nothing has changed after you complete it.
The purpose of this exercise is to determine whether the problem is caused by third-party system modifications that load automatically at startup or login. Disconnect all wired peripherals except those needed for the test, and remove all aftermarket expansion cards. Boot in safe mode and log in to the account with the problem. The instructions provided by Apple are as follows:
Be sure your Mac is shut down.
Press the power button.
Immediately after you hear the startup tone, hold the Shift key. The Shift key should be held as soon as possible after the startup tone, but not before the tone.
Release the Shift key when you see the gray Apple icon and the progress indicator (looks like a spinning gear).
Note: If FileVault is enabled under Mac OS X 10.7 or later, you can’t boot in safe mode.
Safe mode is much slower to boot and run than normal, and some things won’t work at all, including wireless networking on certain Macs.
The login screen appears even if you usually log in automatically. You must know your login password in order to log in. If you’ve forgotten the password, you will need to reset it before you begin.
Test while in safe mode. Same problem(s)?
After testing, reboot as usual (i.e., not in safe mode) and verify that you still have the problem. Post the results of the test.