I close my tray with the game inside and it says

Assuming your disc isn't damage. The problem is with the optical lens of the dvd drive. (the laser) You can attempt a potimeter tweak, to the optical lens. Get yourself a micrometer and a 1.8mm screwdriver. Then email me at [email protected] for directions. :) (This is only a TEMPORARY fix, but it will work long enough for you to either get a replacement laser or to sell the Xbox360) A BRAND NEW laser for the Xbox360 costs $8-13 with shipping included, off of eBay! You will need to know which type of laser to purchase though. If you have a Samsung or a Hitachi drive = SF-HD63. A Ben-Q or Lite-on drive = Hop-141x.

Bad disc, or your lens is bad or going bad. Get your device checked out.

The game disc might be scrached, or smudged... look at the disc CAREFULLY and see. It might not be the disc, (try another one, and if that doesn't work) you'll have to (unplug it first) take the top cover off and look at the optical lense and see if it is scrached or smuged, (or dusty) If it is the disc (meaning another one works) then clean it with a COTON cloth and try that. or get a disc scratch remover (15 to 45 bucks) and use that. If it isn't the disc, Buy a new system ($$) or a new lense($$$$)
Good luck!