Found a way to get past the crash/error on level 3 on the PAL game, it's not ideal, is quite a hassle and you will miss most of the story (doesn't show the cutscenes), but you can at least play the other levels.
First, you need to load a random level and just pause then retry the level repeatedly 20 times - basically you need to continue/retry levels 20 times to unlock the next step, you will probably already have a few. When you think you have done enough Save&Quit and you should get a prompt saying you've unlocked something in Pandora's Box
Now this should have unlocked Mission 3 in the Sub Scenarios section of Pandora's Box, the next step is simply to start this level and leave it playing by itself until you have amassed a total of 15hours of gameplay time - just leave it overnight or something. This is easy if you have a wired pad, as they don't turn off, but a wireless pad will turn off after a stretch of inactivity - you could try placing the pad against something so that a button/stick is constantly pressed (haven't tested this myself) and you might need to replace the batteries at some point.
When you have 15hours of gametime it will unlock the Box Game feature of Pandora's Box, this is basically a level select (with some extra stuff). And you can just start from level 4 to continue from after the crash.
Still hope Microsoft will fix this game, but I doubt it, so at least you can get a bit more from the game this way.