Every other patch for this game has either fixed issues in my game or did not affect it at all. Now when I try to create another character after not playing for a few months, I cannot get pass level 10. I make it to Riverwood just fine, but, along the way, the graphics seem to have gotten worse. Trees, grass, rocks, and mountains in the distance will look terrible, and I will have trees and huge rocks appear infront of me while I'm walking when they should have been visible the entire time. I've also noticed that certain waterfalls and rivers will be invisible as if I was swimming in mid air in third person.

As I make my way to Whiterun, my fps start to drop as my games tries to load graphics off in the distance. I'm lucky if I can make inside Whiterun. When I do make it to the city, the water looks like black muck as it did when the game first came out before the texture fix. When I'm finally forced to leave the city to continue any quest, the fps decrease even more as textures and graphics load. It gets to the point that were it's so bad that I cannot move, and my screen is juttering along as I try to look around.

The only way I'm able to play is if I delete the patch and play on the first version of the game. I'm really dissapointed as I wish to complete the DLCs. Is there some way to fix this?

How much free space do you have on your HDD? You mentioned that you haven't played Skyrim in a while. Have you installed other games or DLC onto your HDD during your time away from Skyim, such that the free space on your HDD has declined to a point where it is very small (i.e. under 10Gb)?

Without knowing the exact details of your circumstances, certain aspects of your problem sound similar to the guy in this thread:
http://www.gamesas.com/topic/1432804-frame-rate-stuttering-since-installing-oblivion/
If your circumstances are similar, then following the ideas given in the thread may help.

I have 144 GB left. I regularly delete content I dont use and clear my cache weekly. Ive even deleted and reinstalled skyrim from the disk and the dlc, but to no avail

Is there a way that i can reset the game cache instead of the system? Ive heard of a way but does it actually work?

Start Skyrim, and then hold down LB+RB+X while the game boots up until the title screen comes up, then release. You won't receive a notification whether or not it has been completed successfully, but you should hear the xbox making some disk noise in the process. It sometimes clears up some of the freezing and/or lagging problems. It may or may not help in your case, but it's worth a try.

Well I tried reset the game cache 2 or 3 times but im still having the issue. Could it be a hardware problem? Maybe something is going out inside my xbox?