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Now its not recognizing the disc at all. It just keeps loading if i try to power on with the disc inside. If i insert the disc at the Dashboard it reads for a second and then displays open tray. Checked the disc again, it is pristine. Not a single mark.
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http://support.microsoft.com/kb/910798
Xbox 360: Console behaves as if no disc is present in the drive (disc is inserted, but does not load)
Not sure if that'll help you - their support website was next to useless when I burnt out my video card...