If the unit still projects well from an SD card, I suggest you just use it as a projector and not try to modify it.
If you are very good with small tools and can put things back together, you might try taking it apart and trying to clean up the focus and shutter mechanism, and of course, get the residue off the lens and (carefully) off the CD sensor itself. You probably won't make it much worse, but you could kill the projector part if you make a mistake.
Good luck!
LCM