This is much better than the 'towel fix'. While the towel fix does work (for a while), it doesn't fix what caused the problem in the first place - which is why the problem comes back again.
This guide will show you how to replace the 'X-Clamps' which hold the heatsinks to the motherboard.
Tutorial Copy and paste from above link: Three Red Lights & Freezing Repair Understanding the error
The most common error is the three red lights which caused by the brackets holding the heatsinks to the motherboard. When the console gets hot, the force put on the board by the brackets causes the board to bend slightly. When this happens enough times, part of the GPU (Graphics Processing Unit) develops a ‘cold-joint’ between the chip and the board. This is what causes the console to freeze – and eventually flash the 3 red lights.
When the console freezes in a game, or even in the dashboard, the three red lights are never too far away, so use this guide before your problem gets even worse.
Requirements
8x 5mm Machine Screws – 0.8mm x 10mm (B&Q Code: AVF-069918)
24x 5mm Flat Washers (B&Q Code: AVF-064968 – sold in packs of 60ish)
Arctic Silver 5 thermal paste (available in most good computer stores – eg. PC World)
Removing the heatsinks
On the bottom of the motherboard, you will see two silver X-shaped brackets:
Pry off each corner of the brackets with a small pair of pliers. Take care not to use excess force that may damage the board. Once you have removed two corners, the last two should be easy. Once you have removed both brackets, turn the board over, and you will be able to lift off the two big heatsinks:
Above: GPU heatsink (left) CPU heatsink (right)
Now you can see the GPU (left) and CPU (right):
The next thing we need to do, is replace the current thermal paste (the grey stuff you see over the two chips) with Arctic Silver 5 paste.
Replacing the thermal paste
Firstly you need to remove the current thermal paste that is on the heatsinks:
I find that WD-40 works well in removing the paste. Simply spray some on the heatsink and wipe off with some tissue until it’s all gone.
Now you need to remove the paste from the chips. Spray some WD-40 into a tub and dip a cotton bud into it. Now gently wipe off all of the paste around the chips until they both have a mirror-like finish:
Now add a
small drop of the Arctic Silver 5 paste to each chip, and spread it across evenly using a piece of card:
Replacing the brackets
Remove the ‘legs’ off each of the heatsinks using a ¼” socket:
(note that your heatsinks should be clean)
Check that the screws that you have fit into the holes in the heatsinks. If they don’t, check that you have the right size screws. Don’t leave the screws there yet.
Onto each screw, place one washer. Now while holding the motherboard up on its side, place one screw through each hole where the brackets where. Insert them so that the screws come out next to the chips so that the heatsinks could be placed on top of the screws (so the head of the screw is on the bottom of the motherboard).
Now place two washers onto the ends of each screw. So the layout is now:
Screw – Washer – Motherboard – Washer – Washer.
Now heres the hard part:
While holding the screws into place and ensuring the washers don’t fall off you have to place the heatsinks into place and screw them down. Do this for both of the heatsinks, but do not tighten the screws down tightly just yet.
Now place the motherboard back into the casing, connect the Ring of Light board and plug in the power and video leads – don’t screw the motherboard down (don’t plug in the fans of the DVD drive either).
Now turn the Xbox on (yes, without the fans – it’s alright). The three red lights should flash. Keep the console turned on until the lights change to two red lights:
Wait five minutes then turn it off. Unplug the power and video cables and leave the console for 20-30 minutes for it to cool down.
Once the console is cool (touch the heatsinks to test), take the motherboard back out of the casing and screw down the screws we put in fairly tight – but don’t overdo it! Now re-assemble the console and try it out. Your Xbox 360 should now be working as good as new.
Tutorial written by Dan Harper (Danhrules)
Based on method by
'Lawdawg0931' 
Three Red Light Fix - XClamp Replacement
Linear Mode
