Apparently I hadn't tested the single-shot basket at all before, since it didn't work with ground coffee or even empty. The little hole was clogged. A thin needle did the trick and now it works perfectly.
I can't get pods to work at all with my Gaggia Baby. I use Lavazza ESE pods. I can't see any logo on the pods, so I assume it doesn't matter which side is up. I use the single-shot pressurized basket and I make sure I have the defuser in the portafilter. I give the portafilter an extra tug to lock it tight. However, when I start brewing, nothing comes out. I can run it for minutes and I don't get a single drop of espresso. I have tried to turn the pod over, but still nothing happens. What on earth can I be doing wrong? It works perfectly fine with ground coffe in the baskets.
I'm glad to hear this worked out for you! The fact that this basket relies on the single hole at the center for dispensing coffee means that while it's uncommon for anything to get through the upper filter, something of just the right shape and size could potentially cause trouble.