Sounds like the image has been corupted somehow, and this has hung the dvd nav drive.

Use imgburn to burn a new image (using the .mds file) and burn at 1x speed.

Not sure if you have to disconnect the battery for 5 minutes first to clear the dvd fault, try inserting the new 1x speed burned image fisrt and see if it will boot the system and load the image.

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Sept 03, M3, Silver Grey. Retro-fits: Modded Mk4 DVD Drive, OEM Bluetooth, VR Control, Rainbow Speaker Upgrade, Sony SOT Amp, HK Sub, CCFL, Intravee II, NightMode.