The feeling is that the US servers are updated to deal with the ban codes, the European servers aren't.
Which is why, as I said above, we need as many people with unmodified consoles as possible to try the repair trick on the US site (preferably with European consoles), to see if many unmodified perfectly healthy consoles get the 54420 error. That way we'll know if it's a surefire sign, or if it's just a bit of weirdness.
Everybody ask your friends!

So seems like the error does mean at least a flag.