So upon further testing, I can teleport out of the mages guild to Caldera. I can also exit/enter buildings in Caldera without any noticable problems.
Teleporting back to Balmora results in a freeze. Teleporting back into the mages guild sometimes works, sometimes gives me a DDE, sometimes freezes. I CAN teleport into the Hlaala manor and then exit into the city. I can enter/exit other shops. Attempting to enter the Mages guild either gives me a DDE, freezes, or a 3rd even wierder alternative.
It loaded up the mages guild but the NPC standing next to the entrance was "fragmented" meaning when she was in my field of view, the whole screen would be obstructed with a wacky "modern art"-esque arrangement of polygons. Great for tripping I guess... bad for effectively playing Morrowind.

Next step is probably to try Mages Guilds in other cities and the Fighters guild in Balmora to see if I get any similar type problems. Will probably also try teleporting to the larger cities to see if they load or if they give any errors. I'm also going to take a look at the mods I'm running and see if anything is an inordinately large size, but here's the current mod list:
Xbox Visual Pack
BetterBodies (Morrowind Summit)
BetterHeads (Xbox version from Johnny-Evil)
Bottle (Johnny-Evil)
Creeper Gold (Johnny-Evil)
Formulae (Morrowind Summit)
Rings (Johnny-Evil)
Area Effect Arrows (Morrowind Summit)
FairMagicaRegen (Morrowind Summit)
MasterIndex (Morrowind Summit)
Medium Armor Rev. (Morrowind Summit)
Real Signposts (Morrowind Summit)
Am I running too many? I figured the only ones with extensive modifications were the Visual Pack, BB and BH. The rest are pretty minor items/tweaks with few meshes/textures. From what other people seem to be running, I don't think I've gone way overboard or anything...
Does anyone know of any specific conflicts with any of these mods? Can anyone recommend a plan of action or any further testing I could do to identify the problem?
Thanks... -ewichern