That sucks man.
I had the three red light problem. I sent mine to Microsoft (during x-mas season) got a new one in a week. They sent me a box, I sent it to them, they gave me a new one and kept that one to fix. I got to keep my Hard drive and everything that came with it, all i sent was the actual tower.
My boss had this problem and Microsoft tried to say that he was past his warranty, so he sued them. He won, they fixed it and gave him 5 free games as a part of the settlement