Did you upgrade or change your bios? If you change from a .06 to a .67 bios or vice-versa then it won't read the data from F or G. However, with the 40gb it won't go into that problem because the drive is less than 137gb. I would imagine though, that you would get an error 21 rather than an error 7 if this is the case. I'll be at work tomorrow until about 3pm Eastern, but if you need further assistance, click my card for my info.
Okay, take a look at
http://www.xbox-scen.../errorcodes.php Bad news: Error code 7 = HDD Timeout. This can mean a few things (and none of them are bios related.)
1. HDD is not connected properly. (Power or ribbon cable loose)
2. Jumpers are not set correctly. (Make sure your drive is set to cable select. If this doesn't work, try master.)
3. HDD is broken or defective.
I've been modding xbox's for 16 months now and I've only ever seen one xbox throw an error 7 (apart from an xbox with no HDD in it) and it was also making this horrible loud clicking noise. If neither of the above mentioned things work then you've already lost your data. It's just a matter of calling the company that makes your hdd and seeing if they will replace it due to warranties. It's not that bad though. I mean You have all of your games on hardcopy, you have the 40gb for now, and all the software won't take long to get back from xbins (if it's not on your 40gb and you don't have an autoinstaller.) Besides, I had a 250 that went bad on me the day I got it, and Maxtor sent me a 300 to replace it! (Just stick below 260gb because after that you have to split to F and G or else data corruption will occur, and I speak from experience when I say that F+G really sucks!)
So make sure it's plugged in right, and check your jumper settings. Good luck!