I'm not sure if by "XP Mode" you mean the XP virtual machine that you can download from Microsoft if you have Windows 7 Pro. It's not the same thing as using Compatibility mode set to XP compatibility. Very few people use "XP Mode" for games.
Try Compatibility mode on a setting other than XP.
TLJ was made for Windows 95/98/2000, so be sure to try those compatibilities rather than XP compatibility.
You may also want to put checks on the compatibility tab next to the checkboxes for
- disable visual themes
- disable desktop composition
- disable display scaling on high DPI settings