billxbs,
I just had the exact same problem with my box, down to the number of restarts before red/green. Everything I heave read suggests that this is a connection issue, so I would go with the previous recommendations and check that if nothing else works, but also check the time settings in MS Dash.
Rather than immediately open my box when mine started fragging, I checked this and corrected it and reconnected the ethernet cable, which I had removed last night, and everything went back to working fine. It's probably a coincidence and the real fix was that I bumped a connection back into place when moving the box around to hook up the cable, but I have also heard that incorrect time settings can cause issues. It may be worth a check prior to opening everything up.
ps. regarding your question about what the second blue light means on the chip, I don't remember exactly, but I think it says in the install guide for the lite plus at
http://www.system-mo...i-bin/pd/kb.cgiGood luck