Sounds like a corrupt boot sector on the hard drive -- it claims it can boot, but never fires off. Could also be a bad CD that shows up but doesn't successfully read.
Troubleshooting steps would be:
1) Unplug all drives, try and boot. You should get a "dude, I can't find a boot device"
2) Plug one in, boot -- it will or will not work
3) if device in #2 works, then try the other device.
You've just nailed down the culprit.