We ended up going through the holidays without our Xbox 360. As we noted in our previous (12/15 update), we had no success with the first Xbox 360 unit we purchased off of eBay, probably due to the previous owner trying to fix the console, and the excessive amounts of thermal paste used.
As we were finishing up the last update, the second Xbox 360 that we had purchased from eBay arrived. The warranty seal was intact, so we thought we would give Microsoft a ring, and see if they would repair it (since it fell under the 3 year warranty for 3RLOD).
Initially, everything went smoothly. We were able to put in the repair request, and get it sent off. Note that when we dropped the box off at UPS to be shipped out, there was a whole stack of Xbox 360's being sent back "Put it with the others" was what the employee told us. Needless to say, this was quite an eye opener as to how widespread this problem is.
A few days after getting everything sent off, we got a phone call from a Microsoft Employee. Apparently we were flagged, as well as both of our repair orders, because we had registered more then one Xbox 360 console to be repaired.
They wanted us to fax over the receipts for both consoles to verify that we were the original owners. We had no problem digging out our original receipt for the first console, and got it sent out without any problems. Because we didn't have a receipt for the one we purchased from eBay, and we obviously weren't the original owners, we completely expected to have to pay the COD fees for shipping the console when the second console arrived at our doorstep.
With all this going on, it was time to head out of town for the holidays. We were hoping we would get at least one of the units back before Christmas (our original console, or the one we had purchased from eBay). Needless to say, it didn't happen. It took four weeks to get our original console back. It arrived the day after we got back into town.
We pulled it out, and it turned out to be a refurbished unit. Not only was it refurbished, the manufacture date was actually a year older then the one we had sent in to be fixed. We were really hoping for a new unit with the DVI port.
The good news was that we had the console back, and could get back to fragging! Plugging the console in, and firing up one of our new games we received for Christmas (Call of Duty 4: Modern Warfare), we were shocked to hear the DVD drive spin-up. It was WAY louder then the unit we sent in for repair. Everything worked fine, but the noise was absolutely intolerable.
A few days later, the other repaired console showed up. We were pleasantly surprised that there were no COD charges. Apparently Microsoft either forgot to charge us for them (because we didn't produce a receipt for it), or it was a bluff to try and prevent people from sending in units that they hadn't purchased originally, we'll never know.
Crossing our fingers, but assuming it was going to be another refurbished unit with a terribly loud DVD drive, we were shocked to find it was a brand new unit. Not only new, but it was actually manufactured in July of 2007, which, from our research, suggests that this is when the Xbox 360 began using the new chipsets and GPUs to finally solve the overheating issues. Unfortunately it didn't have the DVI port, but we could live without that (for now).
We fired her up, and low-and-behold, this unit was WAY quieter then the refurbished unit we had received, but it was also quieter then the original unit we sent in to be repaired.
If we run into the 3RLOD again, or get some more free time, we may open this feature back up and gut a couple more Xbox 360s, but for now we've had enough running around with it. If you have an Xbox 360 suffering from the 3RLOD, the best thing to do is to send it in and get it fixed.
If you're deadest on fixing it yourself, or your warranty seal has been broken, and you don't have a choice, here are a couple links to various ways to try and fix your 3RLOD issue. Note that having SOME technical knowledge of computers/electronics will go a long way in being able to actually do everything correctly. Also note that most deal with the Xbox 360 "X Clamp" design flaw (i.e. the motherboard warps over time due to heat, and breaks the contact with the CPU, GPU, or even breaks solders on the board).
The "official" X-clamp Replacement Success Thread
RBJtech's Tutorial and Discussion Thread
Lawdawg0931's Tutorial and Discussion Thread
Video demonstrating successful X-clamp replacement