Hi,
the normal sequence should be:
power on with the power button: boot unleashx
power on with the eject button: boot M$dash or M$online dash (depending on the boot.bin file)
If it boots the M$online dash with the power button, than it looks like the softmod isn't working.
Are you sure you were using the correct kernel version of the softmod?
If it boots into the Unleashx dashboard, you can FTP to the xbox and change things on the disk that way.
Try to backup your xbox eeprom when you can boot into Unleashx. If things go worse, you will need your xbox eeprom.bin to unlock your xbox harddisk with xboxhdm (without hotswapping)
The error is not a big problem. During the softmod install, the C partition is completely filled up to prevent On Line games to change your dashboard. If your dashboard was upgraded, some stuff will stay on the C partition, and that will cause the error. The filling is done with dummy files that are not used by the softmod.
regards.