Hey Fooniman, the blue light only lights on after the CDVD controller finished the auto-diagnosis and got the optical head to the center of it's trail. The noise you hear is the grinding of the white tab of the laser with the screw that moves it on the tracks. I'm pretty sure the PS2 is somehow not getting the signal of the track0/limit switch of the CD mechanism. That signal is one of the lines on the flat cable that goes to BA6664 (the switch is in the same board as the stepper motor for the spindle)
If I'm not forgotten, it has a 10k resistor (an 4 in one resistor pack near CDVD chip) that does the pullup for that and other important sensor signal lines...
(edit ... BA number were incorrect)
SCPH-10000_GH-001 SCPH-15000_GH-003 SCPH-18000_GH-008 SCPH-30001_GH-005 SCPH-30000_GH-016(V4) SCPH-30001_GH-010(V4)
2xSCPH-10190, 2xSCPH-10350, 2xSCPH-10280
"**** j0 hackers!"
-Sjeep (As seen on TOXIC OS ELF...)