Nah, i don't think it is the console, your problem probably lies with the disc, even if it looks scratch free it can still have problems with it i once had GTA vice city for the PS2 and the same happend, i bought another Vice city and the game worked just fine. As for the 3 red lights thing, that means that your xbox has had a system failure, i would seriousley consider if i were you giving it a break for a week or two, to be safe.
i know wat the red lighs are called... they are the Circle of Death... that means u should send ur xbox to some other country then they send u back a new 1 : zombie :