dangit, that message is a pain when all you want to do is game. Ok this is a fairly common thing with these consoles, obviously it is a DVD drive problem.
I noticed in a different thread you disassembled for painting your dvd drive, did you paint the actual tray? the thickness of the paint could be the culprit which means you have to adjust your laser.
Did you notice the little black ring on the top of the dvd player the keeps the disc centered when spinning? sometimes those fail or people forget em.
Sometimes it is just dust on the laser lense. Sometimes the laser has gone bad. sometimes the tray alignment will do it to you. Any number of things could be the culprit. Try a DVD just to make sure it still reads properly and it isnt an alignment issue.
When I went through this, i just bought another drive that was the same part# and swapped out the DVD drive motherboards from the one that came with the console. Since the original mobo is keyed specifically to the console it came with.
I googled "please insert disk in xbox 360" and came up with a lot of hits, as well as a lot of mis-information. Basically it comes down to the key being bad on flashed drives, or the laser fails on unflashed drives. The remedy is usually like I stated above: replace the DVD drive. Some people have had luck replacing the lasers, but I feel that you may just end of replacing the drive when the laser replacement doesnt work.
hope that helps