Yeah I'm letting the scan complete and its on the stock internal hard drive. Actually when watching the scan progress I see that it's only scanning a portion of the folders in 0000000 before moving onto the next path. The games are all located in numbered folders within the 0000000 folder. I didn't pick the folders myself, I installed them through the normal dash board with XBLA game files I had in my regular 360. I then unlocked all of them with XM360.
I hope I don't have to do a clean install because I purchased this system already set up with freestyle dash. I'm sure I won't have any issues with a fresh install but I put a ton of work into all the games I've installed.
Thanks for your help.
Edit
Wait a sec... lol why am I thinking a fresh install will remove all my game content? It won't right? I'm just going to go ahead with the fresh install. Thanks for the info!