i would jam in halo 2 and see what happens when you tell that to log on to live. "has the update files on the dvd"
if your soft modded you will have to re soft mod when its done.
i reccomend using krazies ndure 1.1.1 splinter cell exploit to do it.
if you are already softmodded you may be able to jam in heimdals xbox engineering disk. "hexen"
use that to explore c and delete the contents of c. then go to d:\stock files and copy the contents of that folder to c:
and then tell it to one click softmod install
if you go the hexen rout, then remember not to restart the box once you have started the process.. just let it do its thing it will restart itself when the time comes.
either way however you get it fixed be sure if your modding to use a decent updated mod with a shaddow c and that has already updated your ms dash before you start.