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Next is the Stalactite layer, where you'll find iron. Then the lava layer, which has diamonds. Finally the corrupt layer, with diamonds and lumite. Best bet for finding obsidian is to check all the surface caves in the area. If one cave doesn't have any, move onto the next one. Eventually you'll hit a vein.
Obsidian is the strongest building material in Minecraft: Xbox 360 Edition, but in Survival mode, it's rare to find a natural source of the stone. Obsidian only forms where water flows into lava, typically only occurring deep below the surface in underground caves.