Xbox – Can’t access Xbox LIVE in GTA IV

In order to cancel an account, you have to call Xbox Support. I did that once after a trial period with Halo 2 on the original Xbox. They really tried to keep me on the service, but I suspect that won't be as annoying as you explain your situation to them.

I think I remember something about the gamertag you cancel being unavailable for a certain number of days or months in order to give you a chance to reactivate your account should you want to. That's probably automated too so I doubt they can make exceptions.

I know this is a late answer, so if you figured this out please tell us what you did as it's an interesting question!

You can't sign in while a guest is also logged in. To get this to work you need to

1. Make sure every profile except for your Xbox Live Gold account is logged out
2. Go to Multiplayer >> Xbox Live and get signed in
3. Hit the A button on another controller

Xbox Live won't let you sign in to Call of Duty Multiplayer with any profiles that aren't gold logged in. The "Guest" account technically isn't gold, so you're getting rejected for that. Adding a guest player is done on the Call of Duty server, not your Xbox.