I was looking through the manual for your receiver at here:
ftp://docs.kenwoodusa.com/manuals/OM...-2004-KUSA.pdf
I couldn't find anything specific about this...nothing on a quick Google search came up. But did you read the page titled "Notes on playing MP3/WMA" (Page 8) in the manual? It does mention a few things to do, such as when you use a CD-RW, "do full format not quick format to prevent malfunction."
Try to see if it works with a CD-R burned with Disc-At-Once and Finalized if the disc you're using isn't burned this way yet. Does it do the same thing with regular CDs? (Yeah, you probably have to dig them out from somewhere, right?

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