Sorry about your lost, it's suck to get RROD. Yeah, on the Arcade unit you are going to have to find the optical cable that came with the HDMI kit or the elite. (Sometimes you can find them used at Gamestop) Or you can used the component cable but the problem is it's too big to used HDMI also (another MS craptastic design).
Anyway, I am in the same boat as you, if my 360 die and go out of waranty I will have to buy another one as I have so many games for it. I hope by the time that happen (2years from now) 360 will be at $99.00.













