Hey, I got a problem with my xbox...
Whenever I turn it on it sounds like there is a scratching noise coming from inside of it, i have no clue what it is but if i had to put money on it i say it would be the hard drive, anyways after a while the xbox tells me there is a 07 error code which refers to the hdd and it tells me to go to the internet forums.
Any Idea on where to start?

A dying hardisk is always possible. Another possible thing is the dvdrom.

Is the xbox modded or is it a stock xbox?

You could take the cover off to locate the source of the noise.

regards.

yea ive read that before and i opened up the box but can see nothing out of place....
when i turn it on though it seems like the noise is coming from the disk. it is a modded xbox with a chip
could all the data be lost if the hard drive is messed up?>

Yes, I am afraid that the data can be lost when the harddisk is dead.
Sometimes you can revive it for a short period if you put it a night in the freezer.
Just wrap it in a soft tissue and put a plastic bag around it, removing as much air as possible, to avoid condens when you take the disk back out of the freezer. Connect it, make a short pray, and see if it boots. Backup all important stuff as quick as possible if it does.

But there is no guarantee that it will work. It proves again that making backups is important.

regards.