Can your friend join in a new game? If so, can you then load the latest save from the current playthrough?
Can you join your friend?
Have either of you tried joining anyone else?
Have you tried hosting/joining an Arena match?
Have you tried joining by invitation and in the lobby?
If the multiplayer setting is on invite only, try switching it to friends only or public.
Try going into Arena mode, create an arena, open the Connectivity menu and check the settings, then exit to the main menu and try joining in the lobby. Alternately, create a multiplayer game lobby, exit and try joining.
Try each clearing the cache:
- press and hold the Xbox button on the front of the console for 10 seconds until it shuts down
- unplug the power cable and wait 30 seconds
- plug the console back in and turn it on
- log into the same Xbox Live account you were using, start the game and let it sync, if required