I figured that that point I would just remove the 2.8 exploit and start over. Well this is where things got interesting. I removed the patch but on the next reboot I got an error code of 13. After looking up on another great tutorial by OCnewB I found out what that meant.
I was still able to ftp in to my box using a cold boot with the SC disk. (Thank the Xbox Gods). Once I did this I found that my C: was wiped. Go Figure! Not being one to panic I started banging my head on the wall. Then I remembered that I had a backup of the c: from the origional hd.
While I am transfering the C: backup via flashfxp my nortons internet security is going nuts with trojan alerts. Not just one type but several different flavors. Now I am using a direct connect between the computer and the box so unknown where these worm/trojan alerts are coming from. I must have had around 10 or so come through while transfering the files from my pc to xbox.
After finishing the transfer I reboot the xbox and the M$ dashboard loads fine. I load up SC and am able to finish the softmod sucessfully. To my knowledge everything is working fine with the xbox. I did a virus scan on everyfile both on my pc and xbox and did not turn up a bug/worm/backdoor etc.
If there is still anyone reading after my long winded post

I would appreciate some enlightenment if there is any to be had.