Your problem is a dying (or dirty) laser lens. One of my friends had this happen to him twice now. Unmodded unit.
Read more here:
Mine is heat related. Fan may also be dying (cheap bearings). The unit is also sensitive to dust, and hates being put on the carpet.
And if heat is such a problem, why on earth did they cram it into a box with zero flow? A "do not put on carpet" warning label would also have been appropriate, at least I think so.
Microsoft made these things from leftover parts, it seems.
I opened it up this afternoon, blew it out, and left it open while I played it for a few minutes. By the time it was fixed, I was no longer in the mood to truly sit back and play it.