My CD did the same thing, it just quit working and decided that there were no cds in it, or at least that is what it said.
Took it to the dealer, they replaced the whole thing. Still have not gotten my six CDs back, but they promised them in 6 to 8 weeks. If they could not extract them in usable condition they said they would reimburse me.
They did suggest resetting the head unit by removing the fuse that is in the box under the hood for several minutes then replacing it. After that, they had no suggestions.
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Black 2003 H2 - Just like most of yours, just possibly with less crap bolted on.
My job:
http://www.HardOCP.com