I am not sure what exactly the error code means, but those darn laptop drives are just problematic. As they age you get flakey results like this. Apple replaced mine 2x on my Powerbook G4, then I just finally gave up and bought an external drive for $120. Best money dealing with all my writable media has been happy ever since.
Try and call AppleCare if you are still covered they will walk you through that hardware reset thing. Mine revolved around a button that was underneath the keyboard. I would shut down completely lift up the keyboard and hold down a little button for about 15 seconds then reboot. This would usually solve the problem for a week or so then it would return.
Bottom line don't rely on the internal drive as your main source for reading/writing media. If you use it as regularly as I did you are just going to wear it out. Sad, but True.