hey,
remember the chip wont activate till you put in the swap magic disks.
i think
open the ps2 and remove the modchip.then pug the connectors back in turn the ps2 on see if its all cool if so. turn it off plug the modchip back in and load up swap magic. Maybe the chip is faulty i suggest you give a modchip installer a bell and ask him to fit a proper mod (duo magic 5 m2 dms3). Then you be able to play games without swapping