I successfully managed to get Linux (Ubuntu) running on my 360 alongside FSD 2.0. A simple install guide is below if anyone wants to attempt this...Should work for you providing also, saves using a USB HDD
The process for this was relatively simple:-
1. Run the base install script for Ubuntu
2. Connect the HDD to a PC using a USB HDD chassis, resize the Ext3 partition to desired size using a GParted LiveCD (30GB in my case) and hide all partitions.
3. Next plug the HDD back into your 360 and format it.
4. Plug HDD back into your PC and unhide the partition (again using GParted).
5. Back with the HDD onto the 360 and run the remainder of the install script
6. Done, in my case I now have a 30GB approx Ubuntu install and 220GB for the NXE / FSD.