From consumerist.com:

Though Microsoft bowed to a gamer backlash and gave 3-year warranty protection for the widespread Xbox hardware failure known as "The Red Ring of Death," it seems another debilitating malfunction, "The Red Light of Death," hasn't become enough of a PR fiasco to merit the same treatment. Let's help it along with reader Steve's story...

"Three days ago my Xbox took a turn for the worst while playing a game of Team Fortress 2. During the match my screen started rapidly flashing green and vertical lines appeared. I figured it was just a glitch so I shutdown the Xbox and restarted, I still had the problem. I tried several different games (Oblivion, Orange Box, Rock Band, GoW, Condemned 2) and every single one of them has lines in the screen. I tried 2 separate LCD TVs and 2 separate video cables. All had the same result, lines in the game-play..

I then went to turn the Xbox on the following morning and received a flashing red light and an error code on the screen. I looked up the error code online and found this: E74: There is high chance it's a scaler chip problem (the "ANA" or "HANA" chip near the AV cable connection) it can also be caused by a faulty AV cable so check that first. In some cases it is a problem with the GPU

I believe the problem only occurs in areas of the screen that are being rendered 3D by the on-board video. Its pretty obvious that the video and/or motherboard are malfunctioning in some form. If you have a look at the screenshots you will see that all 2D graphics (in-game HUD, dashboard) are all fine, only 3D rendered graphics have the issue.

I called Tech support and they said the new 3 year warranty will not cover this issue.
Full Story: consumerist.com