Does it work if you use a different application? Gnome-cd has never worked for me but Totem (with an xine backend) is playing CD's fine with a 2.6.10 kernel for me.
I have a repeatable problem playing music CDs with kernel 2.6.8.1 and
2.6.10.
Running "gnome-cd" to play a CD, the drive and IDE bus flash a few times
for about 15 seconds, and then the IDE bus light goes solid.