Possible solution for common SATA DVD won't read disc

I have been way behind the curve on doing upgrades to my computer. I was still using XP until last weekend. One thing that stopped me was for months now my DVD R had packed it in and would no longer read discs. I seldom needed the drive so ignored the issue and I never seemed to have the time to run down and pick up a new one.
Finally decided it was time, for a number of reasons I won't get into, to do some updating. Picked up a copy of 7 Pro 64bit and a new drive and set about installing the new drive and Windows.
I disconnected all peripherals and did a clean install. All went well except for a nagging graphics issue I still haven't solved but that was a minor annoyance.
I installed all the peripherals and major software from copies saved to HD(that's why I never panicked about the dead drive).
Tonight I decided to install a game I hadn't played for a long time and MY NEW DRIVE WOULD NOT SEE A DISC! I tried numerous discs from CD's to DVD's, tried burning blanks, NOTHING!
I came to a sudden realization that the drive I just tossed in the garbage was likely NOT dead. I started hunting the forums trying to find a solution and nothing I found seemed to make any difference. It took a while before it dawned on me... I was still running XP when the other DVD cratered son it must be hardware, NOT software. After wracking my brain trying to remember when I first noticed the DVD issue and what I had changed on the system. Finally...
I had added a couple of external USB drives to store captured HDV. I unplugged the USB drives and tossed in a CD. Immediately the 'Autoplay' popped up! I tried a couple other discs. They worked fine. I even went into my shop and dug the "presumed dead" drive out of the bottom of bin, swapped it with the new one.
I now have a spare, LIVE drive.
I tried plugging in the USB drives and 'POOF', can't read a disc. After extensive testing, it turns out that with 2 old IDE HD's, one SATA HD and 1 SATA DVDr, I can only support 1 external USB HD and still be able to read a CD or DVD.
Windows 7 does not show any conflicts or problems in 'Device Manager' but obviously there is a resource issue somewhere.
Maybe someone can shed some light on how to get around the limitation but in the meantime I suggest that before buying a new DVD drive try reducing the stress on your sytem first.

The first thing I would do is head toward the Intel support site and look for updated drivers for your ICH7 chipset. Also, check your BIOS settings for IRQ settings and disable the ones you don't use. Are you using PS1 or USB keyboard and mouse?

PS2 keyboard and USB mouse when I first installed Windows 7 and under XP. I now am using Logitech's 'Unifying' USB keyboard and mouse. This was the last thing I installed. I will try the chipset update and BIOS settings. I will post if it makes a difference.