NORMAL BOOT PROCESS:
1.Xbox turns on
2. several checks are done for hardware, incuding RAM, HD, and DVD-DRIVE, just to test if they are present
3.Xbox checks SYSTEM TIME -> if no time is found -> boot dash off hard drive to set time
4. Xbox looks for default.xbe on DISC, if it is not found, goto 5
5. Xbox boots dash off of Hard drive
What is happening in your case:
1.Xbox turns on
2. several checks are done for hardware, incuding RAM, HD, and DVD-DRIVE, just to test if they are present
3.Xbox checks SYSTEM TIME ->TIME NOT FOUND -> Xbox tries to launch dash off of hard drive -> DASH NOT FOUND-> ERROR 16 - DASH ERROR
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The xbox never gets to point of checking the dvd drive for an .xbe. As said before, some older bios's (like d.6) can just skip over error 16, much like the x2 bios can skip over the "no dvd drive" error (11)