I just re-installed Morrowind and I get 'Second ReadFile() in GetChunkData failed with error: The operation completed successfully.'
What causes this? Do I have to re-install the game again?

Was this during the install, or when you try to play? It sounds similar to the engine errors caused by installing Tribunal last (fixed by re-installing Bloodmoon).

A poster on GameBanshee was getting the same error and found it was being caused by a quicksave in his Saves folder. He moved it and it cleared up the error for him...worth a shot.

Sorry for the late post - i had this issue just the other day - I believe it was because I was running MGE with Vurt's grass and had ticked them in the data file launcher list which is not necessary - when i started the game I got this chunk error message as soon as i unticked the grasses the game loaded fine