there is nothing relating to this issue in troubleshooting/FAQs thread.
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Here is what I have found on the Xbox support Website.
Have you tried this yet?
This disc is unreadable
You may be able to resolve this problem by storing the game on a different part of your hard drive. To do this, delete and download the game again. Here's how:
- Select Settings and then select System.
- Select Storage, and then select your storage device. For example, select the Xbox 360 Hard Drive.
- Select Games and Apps, and then select the Games on Demand game that doesn’t play. Take note of the size.
- Select the Games on Demand game, and then select Delete.
- Go to the Games Store and download a game demo or other content that is approximately the same size as the Games on Demand title.
Note Game demos are a no-cost way to add content to your hard drive.
- Press the Guide button on your controller.
- Select Settings, and then select Account.
- Select Download History.
- Select the Games on Demand game, and then select Download Again.
- Once it’s downloaded, play the Games on Demand game.
Make sure the disk is clean and undamaged.
Maybe you can try this: Xbox Disc Drive Solution
It was brand new, sealed, i installed it immediately, then uninstalled it to try after i getting the disc unreadable msg then i installed it again with no problems. Usually if th edisc is damaged it wont re install. Ive given it to a friend to try offline. if he has no luck ill get the disc professionally cleaned before returning it.
