If you're using Title Update 5, all of this is normal behavior. You'll need to use Title Update 4 in order to play legacy tracks that have been bundled with the C3 CON Tools upgrade bundler.
The reason bundled tracks don't work in TU5 is the same reason they appear as "save files" when using using the XBox 360's browser. This is all related to a quirk in the game that also allows customs to work, a quirk that was "fixed" in TU5.
In order to use TU5 and still have legacy tracks upgraded with RBHP bits, you need to instead use RBHP packager. The official download link for the packager has been dead for some time, but I've uploaded a copy of it here, and you can watch a video tutorial of how to use the packager here (second part here). The files you feed into the packager are the same that you feed into the upgrade bundler, but you will need to make sure they're all in the right directories for the packager to process. The tutorial will explain this.
Note that if you have a Mad Catz disc of Rock Band 3, TU5 is baked in, and so your only option is to use the packager. The process is a bit more involved, but the good news is, when you're done you'll have all your RBHP upgrades in the latest version of RB3, with no "unreadable" disc errors.