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Either your savegame got deleted or corrupted. If it still shows up in the main menu, I would suggest copying it to a flash drive and trying to start a new game. If you can make a new game then your savegame is corrupt and you cannot use it anymore. If it will not allow you to make a new save then chances are your Fable 2 disk has been scratched and can no longer be used.
i do not think someone has experienced something like this but you could always try saving the game to the hard drive before you play and playing it off the harddrive which would make sense to work but if this has not fixed it, it means you have had a damaged fable 2 in your hardrive at one point and the only fix would be is to try to get a new xbox 360 if you are really keen on playing this game
This acutally happened to a few of my friends that bought the game. It is something in the disk itself , you can call the 1800 number on the instruction book of the game and debate it with them in the end you need a new disk.
I've seen this problem in action ,it's funny for the first few minutes, during a co op session offline it started to go back to normal after about 10 minutes or so but I'm not sure if it was a fluke. The only other thing I can suggest is to make a new character if the problem still persists.
if you haven't had the disk long take it back and get another fable 2 disk if that doe's the same thing then the best bet is it isn't reading the disk properly. i've had a problem with fable 2 myself but i installed the game to my hard drive which is 6.7GB and now the game has never gave me any problems try installing it to yours if you have one and it should work hopefully lol:)