I'm having a similar problem. When I right-click on the playlist I want to burn and choose burn to disc, iTunes asks me to insert a blank disc. It asks this whether there's already a disc in disc drive or not. Then I get a pop up message asking me to go to the file menu >burn playlist to disc. I click "ok" on the pop up message and try to do what it asks and that choice, "burn playlist to disc" is not an option in the file menu although it is when there's no disc in my drive.
The strange thing is that I'm able to burn a disc from my desktop by creating a burn folder and right-clicking on the songs I want to burn, but not from iTunes.
I'm using iTunes 11.3 and Mac OS X 10.6.8.
Anyone know what the problem might be?