Here is the update. I think I got it figured out (with a lot of help from everyone!)
In testing out yet more thinkgs from A4000 Mad I was finally giving up and took the disc out. I noticed that the on/disc light acted the same way when i took a disk out and closed it as it did when i put a disc in. It flashes green a couple of times and goes back to orange. So i listened to the drive. It didn't spin the disc all the way up just searched it. So I consulted my manual and found :
ON/DISC LED
This indicator lights up orange when the CRW is powered on, and lights up in green when the CRW contains a disc.
This confirms the final analysis that the actual drive is faulty...
Which is a shame as it is a nice drive. So, does anyone have any hints on how to fix a faulty drive? I figured it was worth just removing it and giving it a couple of good whacks. I have bid on a couple of replacement drives on ebay, but they arent nearly as nice as this one.