Sounds like a dying Disk Drive Laser. Not much you can do here besides try to clean the lens with the proper DVD Drive lens cleaners (bestbuy or newegg.com)
You may need to replace the drive. Try ebay for some parts for this older version XBOX.
The previous owner may have done something wrong during the installation I would do a teardown and see if you can find anything out of the norm if you have the experience to do so.
Good Luck!
-Varsity