The first step that you need to take is turning off the PSP. Wait for at least half a minute before rebooting the PSP again. See if the disk read error is still making things tricky for you.
If yes, remove the disk from your PSP. You are required to clean the disk with a piece of soft washcloth. Gently wipe the disk with a moist cloth. Once it is done, make your disk dry. Make sure you don’t insert the disk back, before drying it completely.
If your PSP is coming up with the same error, you need to make a few more moves. It is the time to clean the hardware part of the PSP with the help of a UMD cleaning kit.
The instructions are available on the cleaning kit. There are bright chances that cleaning the hardware will solve the problem.
Even if the cleaning does not make your PSP work, there must be something wrong with the UMD disk. You are supposed to see if another disk works with the same PSP.
If it does, there is surely an issue with the disk. It might be damaged. In this case, you are required to buy another copy of the UMD disk.
If nothing works, quickly contact Sony’s technical support. If the PSP refuse to work even after all the aforementioned tricks, odds are that there is a hardware issue with your PSP. Such errors can only be resolved only by the technicians. Therefore, don’t do any experiments, as you may make the situation even worse.