New "out of box" Elite won't load Pro Street or Gears of War 2

Just hooked up our new 360 Elite and the first game I tried was also a New Pro Street. Everythings fine until the game begins to load (Career mode-off line) then it get stuck. This is all I see "Loading....." after about 5-7mins of this I turned it off and restarted. Again, at the loading screen the "......" stopped blinking as if it froze. Ok, so whatever, the VERY first game I try to play in my new system doesn't work, well, the next one HAS to work....and it didn't.

I tried to play Gears of War 2 (New from the case) Everythings fine until I hit "start" then I get an error message that says "game not recognized. Clean disc with soft cloth and reinsert" ????? This is a BRAND NEW game, just opened the case. Do I have a bad unit??

I was not online.