[hopefully thus doesn't fall into a tl;dr category)
Xbox360 250GB purchased in January 2010 (Mass Effect 2 bundle).
So last night after playing Halo 4 multiplayer with a plus1 for a while, the game started to lag quite badly and suffice it to say, my average skill became somewhat of a detriment to the team. Thinking it was my connection (Optus Australia connection to the USA bandwidth slightly better than a carrier pigeon), I attempted to exit to the dashboard and the system entered a relatively unresponsive state for about a minute before eventually exiting the game. I decided a hard reset was in order and when the console turned on, the loading spinning wheel span for about 30 seconds before the dashboard loaded. Opened the YouTube app and managed to play two videos and at the end of the second, the screen went black and the console became completely unresponsive.
I then turned the console off and removed the hard drive and proceeded to power the console on - powered on without any lag at all. Put hard drive back in, spinning loading wheel spun for about 20 seconds before loading and YouTube app has similar lag when navigating, and it takes about 20 seconds to return to the dashboard.
Deleted some unnecessary files, cleared the cache - no change in dashboard loading or YouTube app though I haven't managed to recreate previous black screen with no response.
Haven't had a chance to play Halo 4 again to test that, will do so in the near future.
The current ambient temperature is about 30 degrees, although I can't imagine that this is affecting console performance - it has been this temperature for almost 2 weeks now. No ventilation issue - the console has its own area with nothing within 10cm of it except the surface that it sits on. Not sure about internal dust.
I haven't had any problems with corrupt files, and no error codes have been thrown.
I don't believe this is a network or internet problem.
Basically, I am concluding that this is a failing hard drive (250GB) but am looking for confirmation.
If this is the confirmed problem, has anyone paid Microsoft to fix hard drive and if so, how much did it cost?
If it is too expensive, I'd consider buying a new hard drive, but can't find anywhere in Australia that sells them.... And worst case scenario, buy a new Xbox but this is my third (1st: RROD, 2nd died out of warranty, bought 3rd to replace) and I have a vague recollection of there been a limit to the number of times you can transfer purchases.