A problem Reading Disk.

Hello, I'm new to this forum. Before I start, i suppose you could call me a noob when it comes to PSP hardware, I know little to nothing about it XD. My problem is as follows:

Just recently, while starting up my PSP (i'm using the slim version), during the time it takes to read a disk, i noticed that it makes this strange scrapping noise, like something is scratching everytime the disk rotates (i'm not quite sure how else to describe it) Eventually, I will get a screen that says the disk cannot be read, and I've tried this with two games so far.

Now, upon opening up the back and taking out my UMD disc, i realized that the small component to the right of the black rotating piece in the middle (looks somewhat like a small jewel, I'm guessing this is what generates the lazer to read the disc? x.x) jiggles a little, up, down, left and right. I'm not sure whether this is supposed to happen or not. but if possible, I'd like to know how to fix the problem, and avoid having to buy a new PSP. Help would be much appreciated, thank you.