For the Xblast aladdins, BT does not need to be tied to ground.
If you check the info in the listing I have for these, I recommend just tieing D0 to ground on the xbox and not using the D0 pad on the aladdin as it tends to be unreliable.
It looks like you have d0 grounded on the xbox here. Try removing the bt to ground wire on the chip.
if d0 is grounded, it's normal for it to frag if there isn't a chip plugged into the pinheader.
I do test each one of these before shipping but it's possible something happened in shipping. If you can't get it working I can swap it out for you no problem