Designing a CD label that leave you spellbound

Enable "subtract from shape area" at the top bar. Create a circle using elliptical shape tool.

From layer menu select layer style>>create layers. Select and merge all the resulting layers.

Ctrl+Click the layer to get the selection. From select menu apply modify>>contract. Contract the selection by 10 pixels.

Press Q to enable quick mask. From "Filter" menu select "Distort>>Glass". Apply settings as shown.

Press Q again to disable quick mask. Press Ctrl+J to copy paste the selection in a new layer.