It's a glitch not just common to Xbox but I own the PS3 version and the exact same thing happened to me. Since noone else is chiming in I will give my 2 cents on this. I heard somewhere on the forums that you can sometimes start to experiemce glitches after your save file goes over 5,000KB...I believe it's graphical glitches which we seem to be experiencing.
I had a previous toon that joined the DB early, hence before the save file reached 5,000KB, and had no problems. I REALLY do not want to start over and believe all my save files are now over 5,000KB at this point. Can anyone please help? My only recourse is to ditch Shadowmere which makes me a sad panda