I know this was a couple months ago but my brother finally got around to messing with it, not entirely sure how he did it, but through chatting with Microsoft support and sending them some pictures and some other things, they e-mailed him a valid code and he now has a year of Xbox Live.
Are you serious? I spent hours with customer support over this and all I got was a line that my case would be escalated to "Consumer Advocacy" which is a total bullshit line they feed people to placate them. Whenever I have problems with Xbox Live codes, I get the run around from CS like I'm some kind of 12 year old trying to steal free Xbox Live codes.
I want to try again to get my codes to work, but I know I'll just waste time with Microsoft's crappy CS reps.