xbox 360 console banned from live?

[cauzomb]

My nephews 360 console stopped reading disc's. It's out of warranty so we tried to repair the CD/DVD rom by cleaning the lens, tray sliders/gears etc.. He had it all stacked on the table, with the drive set off to the side using an extention cable.. Some part of the DVD rom drive doesn't work; probly the laser or lens, cause it will play movies, but not games.. We were unable to repair it via cleaning, but the console still works so my nephew left one of the DVD rom drive cables unplugged, then went on XBOX live to download demo games so he has something to play till we can order a replacement DVD drive.. XBOX live detected that there was something "NOT RIGHT" with the DVD rom and said that the console has been permanently banned from xbox live for trying to use an illegal disc? The actual message was something about "terms of use" and "code of conduct" but when he called them they said it was from trying to use an illegal disc...

There's no way to even read the disc's so I have no idea how they decided that there was an "Illegal disc" in the console.. All our games are store bought, or downloaded from xbox live marketplace... I'm wondering if anyone has any suggestions to get the console unbanned once we replace the DVD drive....