Please check out recent thread which sought to solve the disc error message that appears to be similar to what you are reporting
There was no definitive answer. Still waiting for follow up to the latest line of questions in that thread.
Suggestions about this being a long time issue are a bit misleading. In versions of Premiere Elements earlier than 12, there was a SmartSound/Sonicfire Pro 5 feature which appeared to be linked to the disc error message. And, updating SmartSound/Sonicfire Pro 5 was claimed to be the cause and remedy for the disc error message.
However, SmartSound/Sonicfire Pro 5 is no longer a feature in Premiere Elements 12. Premiere Elements 12 does have a Music Score feature, similar in principle to SmartSound soundtracks, but the SmartSound feature is gone in version 12.
Please review that information in the link above and let us know if any of it works for you.
Maybe good news?
PRE_help has just entered the thread of another who was reporting on a No Disk error in Premiere Elements 13.
Please check out the possible 13 fix as a fix for your 12 issue.
Your route in 12 would be
Local Disk C
Adobe Premiere Elements 12
and in the New Blue Folder is the Old Film.AXE that is to be removed.
PRE_help specifically say "removed". You might want to first try disable by renaming the file Old Film.AXE to Old Film.AXEOLD
so that you can easily reverse the situation if need be.
I am guardedly optimistic since problems with the same symptoms can (often do) have different causes.