Ok folks.
I anxiously awaited the 3:00 AM bell to see what was happening with XBLive.
My "main" Xbox still would not connect, even with the mod chip switched off. I get NO connection from the console and a message about "Connection could not be created".
WTF?
So I tried another modded Xbox, same account (via memory card).
It works perfectly. Huh?
Both boxes have the same BIOS (Evox 2.5, blue, err, ybox). Using flashed TSOPs via the Matrix "trick".
The one that doesn't work (which used to) cannot even ping the servers, P0/0. The one that does work can ping fine P8/8.
The one that DOES work, doesn't even have the hard drive locked.
The one that DOESN'T work, has the drive locked and I originally only brought it up with the original bios.
The ONE thing that remains consistent is the "serial number" displayed at the top of both machines.
Bottom line: It's NOT the mod chip which is at fault.