What color is your x-box logo when you boot up the system?
Mine looks like a hot pink/red color & I had some probs with my chip not too long ago (it became unstable and I think it was because it lost it's alignment so then I got a bigger screw because the threads got stripped) & reflashed it with a "colored" bios.
Ever since then, my system does the same thing yours is doing, but I was trying to think that logically, since it was a colored bios, that maybe somehow it has a cool effect on the LED to reflect the colored bios that the chip was flashed with.
I really don't think of it as too much of a problem since the system works fine.
But if this is totally wrong or some kind of concern, I too would like to know as well!
Cheers!