All you can do is replace the disk drive. If its the first generation X-box then you would probably do better simply buying a new one. My box just died and it would cost 40-50 bucks to repair. Replacement now is $99 new.
There might be a smudge on the disk that you didn't see prior to putting it in,that could be causing it to not be able to read it. Try wiping the disk off gently clockwise with a babywipe to get any and all smudge/dirt off of it.