this looks really long but it can be done in 10 min im just writing it so anyone can follow it.
requires - pc - modified xbox (modified dash) - dvd2xbox - xbox360 - high speed internet - wireless or wired hub - xbox360 hdd - xsata hardware
not sure if this will help anyone but it helped us set up a lan game.
first rip forza to the xbox using dvd2xbox
shut down the orgional xbox
open forza in the xbox 360 while connected to the internet threw a hub wired or wireless.
download the "required update"
launch the game on the 360
create a new profile (cannot be tEAm4za or the other cheat profile... cant remember the name)
go to mulitiplayer
connect to xbox live (you dont need a gold account silver will work)
download the next "required update" (it will take you to part of the origional xbox dashboard this is normal)
-note at this point it is possible the xbox 360 is now lan-able with other xbox360s updated in this pattern as far as i know they will not lan till this point-
turn off the xbox 360
install xplorer 360 on your pc if it is not installed (xsata comes with the installer disk)
connect your pc to the hub wired or wireless if it is not connected
plug the usb cable from the xsata to the pc
turn on xbox 360 to the dashboard
open xplorer360 on pc
click drive, then open->, then harddrive or memory card
select parition 3
open the compatiblity folder, then the xbox1 folder, the the tdata folder, then the 4d53006e folder, then the $u folder
click and drag default.xbe and downloader.xbe to your desktop
shut down 360
unplug usb cable from pc & xbox
you now nolonger need the xbox 360 till you want to lan
install flashfxp if you dont have it installed
type in your xbox1's ip in the ip slot, username xbox password xbox
select the e drive folder, then the games folder, the the forza motorsport folder
rename downloader.xbe and default.xbe to downlader.xbe.bac and default.xbe.bac
navigate to your desktop in the window to the left (in flashfxp....)
click and drag the default.xbe and the downloader.xbe to the window on the right.
rename the new default.xbe to defaut.xbe.360 (this is used if you want to burn this to a disk if i fell like it i will explain this later)
drag default.xbe from the left window to the right again
go to forza motorsport (on hdd not the disk)
patch the default.xbe to be able to launch off the hdd (when i find out from my brother the exact steps i will post them. i made him do this step...)
the game is now fully live updated and linkable to updated xboxs and xbox 360s
restart the xbox
launch forza from the games menu
have fun it worked for me it will proably work for you.