My 360 has been modded for about a month now. And I haven't had any significant problems to date. But today when trying to play Crackdown (not a back up), I kept getting "Please Insert this Disc in an XBOX 360 Console" screen after some green rings fly across the screen. (the disc is not scratched what so ever) After numerous tries I got the game to boot and played for several hours. However when I went back to play I could not get that game or any of my other originals to play. And I kept getting the same screen. I tried all of my backups and they got unplayable disc (they didn't go to the screen described earlier).
I decided maybe flashing my drive to 4.2 would help because I had to apply the fall update to play Crackdown. And I read that Toshiba drives had issues with that with anything but 4.2 with the fall update. When I flashed my 360 nothing changed except my backups would give me "open tray". I applied the rubber band mod and thought maybe that would help. Now my backups after reading for a long time give me unplayable disc (at least not more open tray!). Nothing has changed with my originals.
I will note a couple weeks ago I got the E66 screen randomly with red flashing lights. However when I turned it off then back on the box was fine.
My back ups were made on Verbatim media and burned at 2.4x. I ripped with Schtrom and burned with Imgburn. I also tried backups using XBC. (all my backups worked perfectly on my friends 360 which I flashed the exact same way as mine which is also a MS28) The 360 was flashed with a VIA VT6421 SATA PCI card. MFR Date is 2006-06-28 (So June 28th). The 360 was purchased on November 27, 2006 (lol can't believe I remembered).
Also I know my 360's warranty is voided but I did purchase the 3 year extended (I know stupid), but I read on maxconsole's forums of people sending in flashed 360s that were still under the warranty period (but the warranty was voided) and getting them repaird or a refurb back for free. Is their any validity to this?