Hey guys I just did this fix too, my 360 started seriously wigging out with the flashing lights and locking up. The noise that came out of my speakers was ear shattering..
Anyways, I wanted to let you know that I didn't have a small pair of plyers, but I found that a very small screwdriver, a 1.4mm flathead worked great at popping off the brackets holding the heatsinks. I just slid it as far as it would go before the arc would touch the motherboard and popped them off.
Mine also had the silver pad and my gpu was totally clean (got it on launch day) I scraped off the old stuff with a solid sharpened peice of plastic used for cleaning pots and applied the AS, its been running for a few hours now without a glitch and those damn red flashing lights have gone away.
I was wondering if anyone has added additional fans to the copper CPU heatsink, i have a spare 40mm fan that would just sit perfectly on the side under the air shroud, maybe i'll link it off the fans plug and see what it does for additional airflow.
Thanks alot for the info BenS.
Cheers,
One