Is there anyway to upgrade my hdd??

Any modchip allows you to drop in a new hard drive, including the $4 one in this thread.

 

When booting into XBOXHDM during Linux can you see the name of your drive appear quickly? I've seen drives that are lockable and not lockable appear so there is a possibility the cable you're using isn't good or a pin is broken on your drive. I've tried this method on many PCs without a problem. Maybe mention what you've been doing from Start to Finish, and I don't think it's possible to softmod with SATA, but I could be wrong.