Actually I dont know how they knew. They must test the 360's, probably have some way of finding out. Of course, when the 360 is flashed, it is opened up and the warranty sticker is voided. That would be a clear sign for them although, my warranty sticker was pretty well back in place

, I was 90% sure that they wouldnt guess just by that lol.
It does suck, I now only have one 360 to play 'those' games on and a nicely repaired 360 to play my originals on ( I have originals too, I only use 'back ups' of games I own and thats only to protect the discs which, despite what M$ would tell you, do get burned and scratched from their 'awesome' DVD drives.....

maybe the new unflashable drive wont laser burn my games

. I doubt that though lol).