That is a bit strange!
One more thing to test in Open Firmware:

Insert a data-CD and enter following:

>dir cd:\

Now you should see the content of the CD. If you do, then data-transfer over IDE and filesystem is also working properly - you can be sure now, that your CD-drive is OK (which naturaly should be, because you can see it under Linux and MacOS).

And if everything above is ok, the question: why doesn't see it under MOS ??
Do you have perhaps some alien-CD-drivers in your DEVS: ?