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yeah better send the 360 to MS/BestBuy.

or try this first (I know it's a fat model) http://www.youtube.com/watch?v=Wwhm1djj9n0
Seems to work for a few people. Just don't bang it too hard.

 

You know what I did when I had this problem with my (old) 360 ?
Sadly I wasn't so clever to look up if it's fixable as that video suggests. I thought the laser in the drive was broken, so I opened my 360 (out of warranty at that time) and built in the drive from my brother's RROD'd 360 (even older than mine).
Sounds easy, but trust me it was a lot more complicated than that.