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you cannot play a copied game on a xbox360 without getting the xbox "chipped" many shops offer this service. However, do not do it. Recently Microsoft disabled over 1 million xbox accounts because they used chipped devices.
The only solution for those users was to buy a new xbox and to create a new xbox live account.
There is a Microsoft KB article on this: http://support.microsoft.com/kb/911152
I would try that and see if that helps. Also try removing and reapplying the faceplate. Did you recently move/bump your 360? If so, I could see the KB article applying to your situation.
BTW, what makes me think its user error is the fact that you specify that important 5-10 second window. If a button or something is pressed down permanently, it has a tendacy to be like clock-work, while hardware errors/failures with the 360 seem to be more towards random restarts and failures.
If all else fails, just call MS and see what they can do. You may want to repost with exact details of what is going on, your Xbox's condition (dusty?), and what changed to make the event begin.