CD stopped playing in middle of the cd and now everytime I try to play it it says "unreadable". System is not that old and has not been used very much. I tried using a laser cleaning disk but it would't read that either.

Probably dirty laser optics, especially the tracking optic. Go to Walmart or Amazon and get a CD cleaner disc. It has small brushes that clean off dust.

https://www.staples.ca/products/786397-en-staples-cd-dvd-drive-cleaner

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clean lens. Laser lens dirty, use a cleaner cd/Dvd set, find on electronics stores or professional Audio/video stores

Check if your new cd has an uneven surface , like it's bent . Is the grinding noise occuring for all the other games ?, if yes you should check your Xbox's CD reader head .

Hi,
Please check the dvd layer lense. When there is lense problem this issue will occur.

Try cleaning the discs with straight swipes, with a dry cloth, like your shirt, starting from the center and swiping outward.

It's likely it's dirt on the CD lens. You can try cleaning it with a lens cleaning disc. But if the lens has been damaged it will never read the disc again, no matter how many times it is cleaned.

I belevie you have problem in laser assembly it might not worth to repair it
Cheers

I replayced dvd cd-rom myself it's very simple repair and it cost me $20.00 for new dvd rom. Don't buy CD-RW but just simple black dvd-rom.
I hope this will get you going again.

I would suggest trying some sort of laser cleaning device. You can pick one up at Target or Wal*Mart. How it works is there are a few small brushes on what looks like a normal CD. When you insert this into your CD player, the brushes run over the laser head and remove dust and other particles from it. This can help when discs are unreadable, or if there is static while trying to play a disc. Hope this helps!