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It sounds that for sure your umd unit is not working. Congradulation on your free psp gift but you gonna have to replace the old umd unit. I have repaired a few psp's from family members and friends including changing a few umd units. Try ebay for $22.00 per unit. It works great. Other similar business sites were too expensive.
I have a psp with a broken laser (pretty sure thats what it is).When i put in a umd it doesn't load. No error screen or anything just keeps loading. I looked in the drive, pressed the umd switch that tells the psp a umd is in, and the laser moves up and down but doesn't light up nor does it move left or right. I really don't want to buy a laser assembly to replace this one because I got the psp for free and don't want to spend any money on it, but if anyone knows where I could get a really cheep laser that'd would be very appreciated.
Ok i had a problem like that before but it was from a connection i missed to put in,... double check if all your connections are connected in the psp,..