I had the same problem with a PDS128+.  The PianoDisc technician
from Schmitt Music (where the piano was purchased) had the same
theory as expressed yesterday about the flash ROM, and re-loaded the
ROM.  (By the way, those updates are available to owners from the
PianoDisc web site.)

The problem persisted.  It turned out to be a mechanical problem in
the floppy drive, there is a sensor that feels the disk in the drive
and switches the unit from CD-ROM mode to floppy mode.  If that sensor
gets out of alignment, it just doesn't see the floppy.  Try pressing
the disk in and down to see if the unit senses it, if not, replace the
drive.

Hope this helps,

Scott Currier