well sorry to say it but it looks like your optical block is shot. Same thing happened to me and was gonna cost me $200 CND. lucky i tracked down the original owner and got my hands on the warranty :wacky:
I could of sworn i saw a post where someone offered to buy someone elses broken mz-n1. I searched but could not find. SOO if you still out there and you are still looking for one you can have mine. email me.