Atri- that's too bad man.. but I say towel it.
Look up the "towel trick".. I'm not gonna say I know how it works (but I kinda do), but it did work for me as a temp fix. Just wrap it up in three towels, turn it on (or before), and leave it running for about 15-20 minutes. This will cause it to heat up, and basically- the cause of the red-ring, I've heard the gpu pops out of it's socket.. it's as simple really as adding a different clamp onto the chip/heatsink, but microsoft went cheap on the original clamp. The heating causes the board to flex a certain way, allowing the gpu to reset.
After you leave the towels on for 15-20 (30 tops, to be safe) mins, let it cool down- unpowered, for about another half hour, or so, then fire it back up. It should run fine after this, at least until you shut it down and try to fire it back up again after a day.
When mine crapped out I did this and just left my box on for about three days. Had a more expensive electric bill, but the box kept working until I had to send it in. I had to re-do the towel thing a few times, but only every few days (when I actually turned it off. I later found that leaving it on kept it working.. no heat change.. so the gpu stayed put)
I didn't have a problem once I sent it in for repair, either.. basically, all they do is check in your box and send you a new one (another refurb, not the same you sent).. some are afraid they'll somehow void their warranty by toweling it, but don't fear. It might not work the first time.. but just try it again, perhaps suffocating it more, and it should work.