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Here is the process for troubleshooting this specific issue:
First remove your disc from the tray. I assume you have already done this.
Ensure your faceplate (the front of your system) is on correctly. Sometimes these can become loose and off kilter. Press the two edges firmly with your hands and "push" it into place.
Push the eject button. Although it hasn't worked in the past, adjusting the faceplate may correct the issue.
If that doesn't work, move the disc tray drive gently from left to right when it is open. Again, be gentle-- what we're trying to do here is slightly adjust the disc tray in case it isn't entering your system properly.
Still not working? Time to send it to Microsoft for repair. You can find all of that information on their official support site. Click here for more details.
The very first thing, I would suggest you is to check the CD cover, as sometimes labels on CDs prevent tray to close. If that does not work then do the following. Remove disc from the tray, make sure the faceplate is on correctly. The faceplate is the plastic piece on the front of your console.
Press firmly around the edges of your faceplate to snap it into place (make sure it is flush with the rest of the console). If the faceplate is not on correctly, the disc tray won't close.
If you find that the faceplate is the problem, please contact Xbox customer support to order a replacement faceplate.
open it up ( very carefully) and check to see if the disk tray end is still attached or alligned to the plastic gears that eject the tray. if so check the rubber band to make sure it has not broke or streched.
my friend had the same problem what he had to do was keep opening and closing the disc tray untill the 'reading disc' shows up and stays up but he got really anoyed with doing this so he got a new one shortly after this the ps3 came out...
That is how the X-Box works. It doesn't stay open, because if it stood open and it accidently dropped or anything, the drawer would break, and that would cause alot of problems with Microsoft. Thanks for using Fixya!
Getting to the dashboard screen is a good thing but still cannot rule out a bad circuit board or power supply.
All the symptoms point to a bad DVD drive but the opening/closing by itself do indicate a problem with the microprocessor.
Can you turn the power on and off with the small button?? If not, would definitely suspect bad board.