You are using rawrite or whatever to generate the disks, and not just copying one big file onto it, right?

I'd have to say that if is notices the CD-ROM drive (sr0 is a NEC CD-ROM DRIVE:465) but then claims that it can't find it (No CDROM device found), then the installation is hosed. You shouldn't need further drivers. It sees all it needs to see. Maybe the CDROM is screwed up -- the media, that is, not the drive, although that could be a potential issue, too.

Is this Mandrake 9? And you're creting the CDROM properly, too, and not just copying one big image file onto a Joliet disk, right?