Weird, I just had my year old one with the supposedly new chipset RROD on me. Luckily still on warranty for another few weeks. I noticed the same thing, started to hang on games, then bam, three red rings next time I tried to turn it on.
I've actually seen a few of these for sale in the last week, so maybe a batch suddenly crapped the bed?
Was thinking of the Elite option as well, but also don't want to give any more $ to MS
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