Droot depending on how badly you wanna get this working, I have another suggestion.
You could set it as 'Slave' device on IDE 1. Go into your system BIOS and instead of booting to the HDD, have it boot from the CD-ROM first. Reboot the system with a bootable CD like Win98/W2K/ XP... if the system boots to the CD properly, you then know atleas the CD drive is working properly and narrow it down the problem to IDE channel 2 or the Cable.
The other thing is that I noticed on Lite-On's website that there is a firmware update for your model. You can get it here: