Ok so let me get this strait (just so i can add it to my 'book o' knowledge' as well.) Some people can't get on xbox live unless they first back up there E:\ drive, so as not to loss anything, and then erase everything in TData and UData? Seems kinda extreme but what ever works i guess.
I was try'n to figure out why it would happen to modded boxes but not unmodded boxes, but an unrecognized game in the E:\ directory would do it I guess. I wonder if you have linux installed in ur E:\ if it will block you from logging onto xbl.