I got this same error. Symptoms included my profile being lost from the hard drive, some profiles becoming corrupt, Netflix continually wanting to activate my device (it wouldn't last past a reboot), and then the Netflix app continually trying to redownload
but never getting past 1%. It looks like my hard drive went bad, and formatting didn't fix it. I removed it so that the 360 is using the internal memory unit and everything seems to be working fine now.
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