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I'm having this problem too...my other games work fine and I rented TWO discs from gamefly and both give me the same error. I've tried both from the disc and both by loading it onto the hard drive. When I select New Game the music stops and the game freezes on about the third (give or take) loading screen. It must be something to do with certain 360's...I know mine was a refurb since I had to send my 360 in for repairs (for the second time....)
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