I would guess that the CDROM-drive is bad. If the OS is saying it is mounted.
Well, you can "mount" any device, provided you make a devs:dosdrivers/
entry for it. I could mount my CDROM while it's not plugged in, if I really wanted to.
So, before blaming hardware (those AppleCD drives were pretty robust!) I'd follow Kronos idea and check out that mount file and it's associated icon info. Most likely it's just got some incorrect info in it for your particular setup. (Wrong SCSI device, wrong unit #, wrong L:filesystem, etc...)
And, of course, I'd also follow his advice about ignoring DoomMaster/BoingBoss. The occasional word of wisdom is more than outweighed by the many words of intentional misinformation posted from those accounts.
