I've got a 1.0 Mexico XBox w/ a 160 GB Western Digital HDD and a Xenium ICE installed. I originally ran XBL with the stock drive, but I may or may not have used the bigger HDD after the XBL2.0 date.
I played Halo 2 for about 10 hours on the 10th, using the retail BIOS, and just checked now, and I can log on to Live fine.
I believe that the key to proving or disproving the marriage theory is by booting the retail bios FROM THE MODCHIP!
Instead of disabling the chip, and leaving it open to probing, or whatever is going on, try flashing the retail bios to one of the banks and booting to that. It wouldn't explain the TSOP bans, but it might help the people with modchips.
Another theory I have is that modchips that require a bios selection on boot might trick the probe, should it exist, into thinking that nothing is there. The Xenium's on board OS isn't loaded the same way as the bios, as far as I know, so it could be tricking the theoretical probe into thinking that there's no modchip there at all.
If you guys could test these theories out, we may get closer to solving this problem.