Audio issues and dissapearing crosshairs!!

Bought this brand new when it came out and after clearing my backlog of games went to play it yesterday. Installed discs 1 and 2 then dl the anarchy extras, sewer missions and an 8mb title update. Was loving it till I got to the wasted garage. Saved game and when I went to resume I noticed there was no audio for my guns, continued playing a few minutes then the crosshairs vanished! Reloaded my save and the screen went black and froze up forcing me to restart my console. Managed to play a little while longer then went to do some mutant bash TV. When I started there was no circus music and no comentator audio either, then no enemy audio and eventually the crosshairs vanished again and it froze up forcing me to restart! This was happening reguarly after that, always the same issues, loss of audio (either enemies, my weapons, speech or all!) then crosshairs dissapearing until it freezes up and forces me to retart console. So far I've tried clearing cache, deleting title update and reinstalling disc 1 only but nothing helps! Don't think it's a hard drive issue as my xbox is only 8 month old and has 201gb of free space and I haven't had any problems at all with other games (even fallout 3 & new vegas weren't anywhere near as bad as this!)

Also tried installing on an older 20gb xbox (disc 1 only) and the same issue after only a couple of minutes of playing! It does seem ok when playing from the disc but I don't really want to do this as it looks and feels noticeably worse when not installed imo but I'm worried about damaging my console by constantly having to restart after it crashes. Anyone having similar issues or got any suggestions to fix this? Gutted as I paid ￡40 for it when released!

Since you already tried it on two different consoles with the same results, i'd say this has got nothing to do with overheating although it looks like that.
But my impression is that you're the only one with that failure. Never heard of that before.
Is there something special you do with your consoles? Are they modded in some way?

Thanks for the reply!

Neither console is modded or had anything done to it and the newest one is only 8 months old with more than enough free space. It is well ventilated and don't think it's over heating as this can happen even after only a short time playing the game. I haven't found anything else online of people having similar problems either which is why I registered here hoping to find an answer! Forgot to add in my first post that all the menus (inventory, armoury etc) go all weird and glitchy as well when this happens! Since then I've stopped playing rage for the time being and have installed dead rising 2 off the record to my hard drive and this plays fine, no problems at all! So still at a loss with what to do....

If it's not the Xbox(s) than it must be something else, so here some questions:

On what TV set / panel are you playing and how is your Xbox connected to it? HDMI, VGA, or oldschool composite?
At which resolution are you playing? Look at your Xbox video settings.

Do you have any other storage memory connected to your Xbox such as USB sticks or the old memory cards when playing.
Do you have anything else connected like Kinect or use third party hardware?

I play Rage on my second generation 360 (Falcon board, 175 watts) with a 60GB Harddrive, connected to a Samsung PC panel via VGA at a resolution of 1440x900 and never had any problems at all except for one achievement not unlocking. And i played this game to the max.

Thanks for your help!

Playing on a xbox slim 250gb connected to sony bravia lcd by hdmi lead at 720p. Don't have kinect or any 3rd party hardware and no usb/memory cards attached to console either. Been playing from the disc itself and even though it doesn't crash then it looks really bad (comparable to a ps2 game, worse at times!) when not installed. Have just finished the 1st disc and installed disc 2 by itself to see if it will work that way. Played that for about 15 mins last night and seems ok so far, looks much better too which leaves me thinking there could be a problem with disc 1? Will try playing some more of the second disc and see if I have any problems with it...

If disc 1 can be installed without any read errors or exceptionally long install time it is unlikely that disc 1 has problem.
But if disc2 works without any problems when installed or is run via the dvd drive, than you're definitely right.

The texture loading in general should be slightly more noticable when playing from the dvd than from the harrdrive.
But it's always there since the consoles have very few memory for a game like Rage and should be most noticable with the large open maps like Dead City on disc1.

well I completed the game yesterday and the 2nd disc worked perfectly when installed, no problems! the 1st disc didn't have any read errors when installing but definatly took a while longer than the 2nd one. I'm pretty sure now that there isn't any issue with the hard drive so I'm thinking there must be some problem with disc 1. No problems with the second one and not bothered about multiplayer! Would any mods or staff members be able to advise if it would be possible to get the 1st disc replaced?

Since no offical here answers:
Check your Rage manual. There should be something about replacing discs in there.

I have this exact same issue happening with mine right now. I have currently tried uninstalling both discs, reinstalling both discs, and even starting a new game from scratch after a reinstall. All of these things may fix it for a minute or two, but every time it happens again. The disc appears to be fine as well, however no other games demonstrate this problem. Mine hangs with a black screen at any loading point once the visualization issues occur (crosshair goes away, as do the images for the buttons as you approach an openable door, character to interact with, etc) so I don't see how I could proceed all the way to the second disc.

For reference I'm running an original xbox 360 (has RROD'ed once and been fixed) connected to a Samsung LCD via component video cables. I have an official xbox 120GB HDD on it as well which is what I'm installing to.

I just got around to playing Rage this past week as it was on a stack of games from xmas (finally tired of MW3)... did you have any luck getting your disc replaced? I called my local gamestop and they said they can't help unless I want to sell it back and buy another even though it's faulty.