I've told this story before, so I'll keep it brief. My friend was having the same problem. He called Nintendo and they sent him to a local authorized repair center. (Lake Electronics in Albany, NY) Not only did they fix it for free, but they also dropped it off at his house. Plus as an added bonus, they replaced the "disc" on the console lid saying "it looked a little scratched." Also I might add that my friends GC was beyond the limit of his warranty. That's customer service.
I also must say that my GC has seen hundreds of hours worth of play. It has traveled back and forth between two coasts over 7 times and not once have I had the slightest trouble with it.
Unlike my first PSX and my second PSX and now my Ps2. All of which have disc read errors. I actually turned my first PSX into an ashtray.
Still if you think thats bad, I have another friend, whose X-box literally started smouldering, even though it was not turned on. He came into his living room and smelled something funny. He traced the odor to his X-box and found out that his system was now dead.