How old is the drive and has it had a lot of use. All CD drives die eventually. Luckily they are cheap to replace (unless they are a real SCSI drive and you want to replace that. IDE drives are VERY inexpensive.)
If you haven't made any changes to your system, moved it, etc. it could have just given up. Real pressed CD's are easier to read than CDR's that have been burned. There is no telling what PowerISO did, but that seems to be the thing that put it over the edge right?
You can delete all refernces to the CD drive in Device Manager and reboot. Sometimes you get lucky and that clears things up.