Problem is you cannot access the back-up bios because you have a v1.6b. When you boot from banks 5-8 which is flashbios 3.03, did you changed to banks 1-4 before flashing x3_3294? If not, then you need a modded non v1.6b xbox to flash your chip with. You can try pressing power+eject button repeatedly to try accessing the back-up, some proved it worked...
error 5 means your HDD is unlocked