ok, i might know the problem. I wasn't quite understanding. The first batch of 1.6 chips did not come with cromwell bios completely compatible with 1.6 xbox's. However, the chips are fine. You have to find another means of flashing your chip. Do you have a programmer? As soon as you update with the x2_4983 bios (check to make sure the bios work with 1.6's first though), everything should work fine.
There are a couple methods of flashing the chip, like exploiting or using another xbox. The problem with both is that in exploiting, evox will read the tsop on the xbox as locked (since that is what you boot from), and will not force a flash on the modchip after you turn it on. And Xbox swapping requires re-soldering and an older xbox.
You can try a method I said above or maybe get a replacement from the shop you bought it from, which might be a 1st gen 2.6b as well
xbox swapping sounds like the best method, but can be quite long. And if you're not good at soldering......