Ok so I have 2 modded xbox's, 1 is a 1.0 xbox that I have modded with an X3 modchip. The other is a slim 1.6 xbox modded with an x2.6 modchip.
I have a 160gig seagate hard drive that I use to play my backups. It originally started life in the 1.6 xbox back when it was in my normal xbox case. Then when I built my slim box I transplanted it to that case to replace the 10 gig I had been using for my media center. In the mean time it had been used in the 1.0 xbox, but recently I've been playing a lot of xbox live so I keep the 160 gig in my slimbox.
Here are the symptoms of the hard drive when in the slimbox:
It squeeks like it's going bad, but when I put it in my normal case it has no problems at all.
It will hang, sometime it loads xbmc then hangs, or it just hangs at the X at the flubber screen. It never gives me an error code, and again, when I put it in my normal 1.0 case it works fine.
Some things to consider:
I'm running my fan off of the 12v from the molex, it's a little 50mm fan that I'm trying to control via a fan speed controller I ripped out of my desktop since I'm not using it on there. Could this convertor be sending some reverse current that's messing with the hard drive?
On my slimbox I have a 10 gig hard drive with just xbmc on it and I can run it fine on my slimbox, no hicups or anything.
One time I just let the hard drive keep squeeking and working untill it seemed to clean itself out, then proceeded to use it flawlessly and squeekless for a couple hours, but as soon as I restarted my xbox it started acting up again.