Xbox360 Elite with busted hard disk

[Job Hunter]

went out and bought 360 Elite. Bring it home, unpack, connect - clankety-clank sounds and error E68.

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Google

yelded "HDD error" when searched for E68.

Disconnect HDD - box works just fine, except now it has no internal memory whatsoever, means no saving, means box is useless. Splashing 80 quid for working HDD is not an option and sending a box to M$ to get replaced by reconditioned one is not a thought i entertain much...

So i dig up a receipt and it states that the box is EXEMPT from 30 day money back guarantee... WTF ?

I'm to go back to argos later today (4:32am as i type) and from my past experience i know they will stonewall me.

Item paid with cash so card chargeback is not an option (ok, ok, daft i know...)...

Do i have some sort of weapon for this situation ? Any particular laws to cite when i speak to manager (eventually) ?