ok, that is weird behavior for sure. Having the wrong key wouldn't cause the 360 to red light, you just wouldn't be able to play games, you would be able to play dvd movies though.
What country do you live in BTW?
When you first tried to flash this 360, did it actually start flashing and then give the error, or did it give the error straight away?
What I would do to start with is since you've already ran a restore on it, re-dump the firmware straight from the drive and compare it to your original that you have to see if everything is the same. Compare it in a hex editor if you have to. This will tell you if the restore actually took.
