I got the same problem the other day. My brother got a 360 for his birthday and a memory card so he could transfer his data from my 360 (which he's been using a LOT) to his own.
When I got mine back, I turned it on and got the three flashing red lights in the top left, bottom left, and bottom right rings. I planned on using my Gamestop warranty and getting a new system anyway (I have a pre-Falcon and HDMI system and I want current, dammit!) so I told my boss to put my name on a Pro system next shipment.
Meanwhile, I unplugged everything, took out the harddrive, turned it back on, and it worked. Then I turned it off, unplugged it, put the harddrive back in, turned it on, and it worked again.
Still planning on attacking the next shipment of 360s, though.