Some 360's Won't read discs. MS to replace with Free system, year of Gold

[Reasonable]

Generous offer, and the best approach.  With RROD history and current PSN woes the last thing MS needs is similar bad press to Sony.  Clearly this is something unfixable unless they back off the new format so the only sensible option is to replace the older consoles and get them off the market.  The 12 months Gold is the suger on the pill.