After thinking about this a bit more, I've come up with a few scenarios:
One, it could be that there is a bug that is overriding the OS fan code, causing the fans not to run at full speed. This is pretty unlikely, but it is Mad Doc Software we are talking about here.
More likely, the game is only utilizing one core on the 360, as utilizing more than that would require them to actually have given a shit about the port and would need a lot more programming work. So, only one core is running, thus the OS doesn't kick the fans into high gear. Not many games utilize one core, and this game is constantly spinning the DVD drive which causes a bit of heat in the box as well. This could potentially be bad for the incredibly unstable 360 hardware.
Third option is the above is true, but the system itself is safe... and the random instability, audio glitching and hard crashes are simply just a really shitty programming job by Mad Doc, and should have never passed MS Cert.
What makes me nervous, however, is that I've never seen a game released on the 360 in such an unstable state. All of the crashes are random, which looks like the system itself is failing. And how could a game with this unstable of a codebase ever pass MS Cert?
The 360 test boxes we have at work are generally a lot more stable and less prone to red-ringing than the average consumer system. This is a combination of them all being replaced with the newest heat sinks (because the bad ones failed a year ago) and the others having that large fan casing over the harddrive. Very few of those have failed.
A scenario that may be likely is that MS Cert has much more stable and better cooled boxes, so they didn't notice the game crashing because of the heat generated by the main fans not kicking in.