I don't know if you have heard of TheSlimShaky on Youtube, but he has made himself into a bit of a celebrity with this video. The video may be slightly hazy but the method he describes fixed my Xbox 360 open tray error and didn't cost me a dime. Check it out. If this video helps you leave some feedback below.
Basically what has happened to cause your Xbox to stop reading the disk is a mechanical failure. If you look at any other website they will tell you that the laser is broken and needs to be replaced. That is not true. I found that the laser would go beyond the allowed range of motion and lock into that position. It was going out too far and could not come back. When this happens it gives the impression that the laser is bad but what is actually happening is that the motor and worm gear is worn out. I noticed when I took my Xbox apart and started moving the parts around that the gear was not moving the laser back after it was fully exended. I didn't really want to spend any money to fix my Xbox so I thought of a way to fix it free. All I had to do was keep the laser from extending all the way out. Watch the video and see how I fixed it super easy and free. This works for the slim too btw.
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