Ugh... I've started taking it apart last night. Unfortunately I didn't have all the tools. Going to home depot tonight to get all the parts.
Three flashing red lights around the Xbox 360 power button (nicknamed the "Red Ring of Death" or "Red Lights of Death"), in lieu of the one to four green lights indicating normal operation, represent an internal problem that requires service. Warning signs may include freeze-ups, graphical problems in the middle of gameplay, such as checkerboard or pinstripe patterns on the screen, and sound errors, and the console only responds to pressing the power button to turn it off. These events may happen once or several times until the hardware failure occurs, or not at all. If the console freezes occasionally, the error will not necessarily follow. When the error does occur, on the user's attempt to turn the console on the three red lights are seen and the console does not function.Learn more about it here.
This error code is usually caused by failure of one or more hardware components, although it can indicate that the console is not receiving enough power from the power supply, which can either be due to a faulty power supply or if the power supply cable is not fully inserted into the console.
I'll post some more details soon. Hopefully it works.