I've tried everything possible on the first console (reboot, reinstall, delete cache) and it stayed the same. This morning, I installed it on my secondary 360 and it's doing the same thing on there. At first, it would only launch as a trial and then it was back to playing perfectly fine but as soon as I got to act like a full version, it went back to being a chopfest every time I fire at something on the ground.
The only thing I can think of is that maybe you have a Slim 360? Mine are an Elite and the old white model.