use something like c-xbox that is an all in one xbox ftp prog that will auto patch games when needed and can ftp directly from an ISO, but extracting beforehand is also fine as it will still try and patch the xbe (this is not that same as display patching)
Never actually needed to do any display patching prior to a game sitting on my internal xbox HDD, internal on the fly patching seems to have worked so far, though can't say I have tested every single game out there or even close
(on the fly patching may not work with all games, I know this does not work with all Wii games, some games on that system will just not work if you try and force it to any display apart from the original display... just aswell I have a multi regional TV
)
The game itself may be detecting the region of your console, this is not uncommon, almost every system has it's problematic imports, some systems even include backups in that.
The Dreamcast I found a few NTSC-J & NTSC-U games that would be scrambled with a RGB scart lead connection on my PAL system, so required patching before burning to work
i.e. I recomend you atleast try what Inferno recomended