BTW you can try to see if it works ok with CacheCDFS.
CacheCDFS comes with Os3.9. Copy the CD0 mountfile from the Os3.9 CD to DEVS:dosdrivers en enter the correct device and unit number in the mountfile with a texteditor.
If the same problems occur with CacheCDFS, it might be a hardware problem after all (faulty PSU?).