I've got tons of experience fixing old 360s, ripping them apart, swapping heatsinks, upgrading thermal compound, new fans, swapping motherboards, fixing flex under GPU everything it took to get them to stop red ringing.. my success rate has been about 80%..
At any rate, you should try starting your 360 up without the hard drive disconnected since, in a lot of cases, the OS taking a long time to load may deal with your hard drive being faulty. You shouldn't need the hard drive plugged in for it to load, as the initial OS and system files are stored within the chassis on on-board chips. If it turns out that the xbox loads faster with the hard drive unplugged, then you win and you need to reformat that drive or delete a bunch of stuff of it if its really full, because it may not be faulty, just needs a reformat.
If you know how to build a PC and shop for the parts, you can put a good one together for under a grand using sites like newegg, xoxide,
amazon, etc... Or just go to Costco/BJs/Sams and get a dell xps, that's where we ended up buying all of our workstations for the studio.
If you're gonna go the modded xbox route, use this new diddy,
Wasabi 360 - The ultimate optical disc drive emulator for Xbox 360 Phat and Slim
they're the most user friendly option.. good luck getting one until feb, theyre way understocked, but it's what Ill be doing to mine. but remember you cant go on xbox Live with a modded box, they will ban the box itself and it will never be able to go online to Live again. They only way to get your box back online after being banned is to get another CPU ID from another xbox, use a certain software that swaps it out onto yours and then youre good, kinda like swapping VINs on a car in a chop shop.. but you cant use both of those boxes online at the same time.
