Reads disk but then it says to play this disk put it in xbox 360 console

This is more than likely your laser that is dead and its possibly a samsung or hitatchi drive, be careful when buying a new laser because there is a lot of dodgy ones around at the minute which can damage your machine or at the very least will be inferior and not last long.

It could also be the logic board or the drive belt too, if the logic board is faulty no matter how many lasers you try it will do the same, the fix is to replace the logic board.

if its the drive belt well this is very easy to try and is what id try first, open your 360 tray and look inside the 360 you should be able to see the drive belt, make sure its attached properly and then take this out. replace it with a new one and see if this recifies your problems.

SOMETIMES if a drive belt is stretched it will not close properly and then a fault like yours will occur. its all a matter of eliminations. Drive belts can be found on ebay.

www.XboxRepairKit.co.uk