Tried CloneCD?
Just a thought.
It sounds like the copy of TH2 is a bit suspect.... Have you tried letting PSXCopy take it's course? A dodgey copy is readable usually (notice that, I stated USUALLY!) but only in a good reader. When it has read in, burn back on a good quality CD at x2 or x1 just to make sure that you get a better copy than the suspect one you have now
