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Go to the Xbox360 System area and run the Network Test and see how it goes. A Strict NAT setting will allow you to play online but will affect the connectivity somewhat. In my case I had to log on to my Router and Allow certain ports access. My router had Xbox Live as an option to open, yours might too, have a look.
your 360 is a first run off assembly. they were junk from the start. my warranty expired also but called microsoft and they said if the ring of death is related to the first run of 360s they willextend the warranty. exactly what happened to me. 8 days later they sent me a brand new 360 cause problems with the first run 360s can't be properly fixed. contact them tell them the problem and you will get a new one. hope this helps Tadster
Call 1-800-4MY-XBOX. All XBox360 consoles have a 3-year limited warranty protecting against the 3 red lights. Since the XBox360 hasn't even been out for three years yet, yours should still be under warranty and will be replaced for free.
I bought my xbox360 when it first came out. Im guessing you have your 360 standing up, there is a piece inside the drive that scratches the disk and ruins the game. Microsoft just extended the warranty on the 360 recently, I would send it back to get your drive replaced. However, I don't know what to tell you about your games, but they are probably ruined, I'd ask Microsoft about that too.
There is the link - Good luck