So, I called MS yesterday morning, when the guy asked me "How can I help you today?", I replied " I bet you can guess why I'm calling", the guy laughed and said, "Yes, you have 3 red lights flashing." Anywho, the process was quick and the agent was friendly, they tell me I will be getting a box in 7-10 days to put the 360 in. I understand that it should take a month to get it back. While i hope to get a new one with the HDMI and falcon, i doubt that will be the case, most people either get the same one back or an older refurb.
I think that now that the cat is out of the bag on this problem, that MS is doing a pretty good job here, though I wish they would throw me a bone as well, like 5000 MS points for my trouble, that would be nice. I have heard some stories of people getting free games when they get it back, we will see.
This event will in no way make me buy a PS3 today, someone (BenKenobi88) earlier said it right, I play the 360 because it has the games. The only thing that will change that is if and when PS3 gets a strong library, and then i will have both. I'll keep you all updated as I am sure you are all just dieing to know what happens :P
Oh, and no, i never used any compressed air on it, perhaps i should have, though it certainly was not that dusty.