Basically i got the exact same problem as this guy.
my psp hangs during start-up / looking for umd - AfterDawn: Forums
hi guys! I have this problem with my psp. When I turned my unit on, it will display the "PSP Logo" and will move on to the wavy lines. However, it will be stuck at that state for a long time. After waiting for around 5 minutes, a message will appear: "disc cannot be read" (i have no umd loaded in the bay). after that, the menu will show up.
The problem is, when i play my ISO games, the message "do you want to quit the game" always pop up.. (Just like pressing the home button).
Is there a way to fix this? Is there a way for my psp to stop looking for umd's upon start up?
I consulted my shop and they said its a nand95 problem and i have to pay almost a 100 to fix the board.
Basically, the problem can be temporarily solved by placing a UMD in the drive.
One guy suggested that its the UMD drive fault and not the nand.
The problem cannot be the NAND. When you install via service mode it completely wipes all of the NAND. The problem has to be the UMD drive. As I said in the beginning you should give it all a clean and look for the catch mechanism that tells the PSP that a UMD is in, make sure it's not sticking.
Failing that it's just a faulty UMD drive. Use the plugin that iamafreak recommended or replace the UMD drive unit.
I've already tried using Dcv8 and restoring the IDstorage, problem still remains. Tried using the noumd plugin, problem is still there. Just that when i use the sony np9660, the problem sometimes goes away for once or twice. But is still recurring.