sounds like you have flashed the hacked bios to bank 1 and not bank 2
1.6 xboxes act really weird when a hacked bios is put on bank 1 of the xecuter 2.6 chip
http://forums.xbox-scene.com/index.php?showtopic=351619 is a nice guide for preparing the bios for use on the 2.6 xecuter chips