I bought the cd from sold out software and installed
Installed the new patch. (3.7.0.0)
Getting an "Insert CD" error
Here are pictures proving I'm not pirating the game and the error

Please open a command prompt, and run the following commands:dir /S /Q X:\ > filelist.txt
start filelist.txt
Substitute X with the drive letter of the disk drive containing the W:A CD.
Please post the resulting file here.

Sorry for the 7z file but the text file exceeded the max

Are you sure the update was installed correctly?

Please make sure that this doesn't apply to you:
http://worms2d.info/Troubleshooting_FAQ#I_get_a_.22No_CD.22_Error

Check the version of the WA.exe file you're launching - it should be 3.7.0.0.

I've tried it with and without the update.
No matter what I get a "no cd" error.
Initial install is 3.0.0.0
I'll install the update to 3.7.0.0
Still nothing and everything installs fine

have you tried making an ISO image of your CD, then mounting it?

Yes sir. I've tried multiple times

Can you save this program (http://dump.thecybershadow.net/51c8661e9123cd2812f6ecffaa9b8bb1/drivelist.exe) on your desktop, run it, and post the created drives.txt file?