I've moved the layers around and the only one close to an inner circle is called light plastic and gives me the result below.
All of the layers in the template are... drop shadow, outer ring, disc shadow, 'your image here', 2nd shadow, 1st shadow, light plastic, hole shadow, center hole shadow, plastic, and the four colors.
It seems to me as if the template is incomplete.
I can usually pick up on these sort of things quite easily but for some reason this is not one of those times

If I upload the original cd scan can you see if you can do what needs done by simply using the template... that way I know if there is a template issue or if I'm just being stupid.
