Ronnie, I had the first released xbox also and I had some problems like that. It ended up ceasing function totally and I had to send it to MS. They fixed it for free and it has been perfect since.
MS even threw in a free xbox beanie (which looked pretty stupid) and a xbox cd case that I actually use. I sold the beanie on xbox for a whooping 13 bucks.
Maybe you could try getting it fixed before you do any heavy changes to the inside? (Too late?)