@zippyzipT7: Just a thought, but what happens when you swap the harddrives from your consoles? If it suddenly starts playing after all, then it probably is a caching problem of some sort.
After I cleared my cache on my Falcon and on my Xenon (which I just sold a couple of days ago) it played just fine. I actually finished the game last sunday and it was really worthwile doing. Wolfenstein also plays just fine on my Falcon, but I didn't have the chance to try it out on my Xenon before I sold it.