So i brought my xbox 360 2 years ago, working fine, very happy. Now a week ago, my xbox 360 started freezing and red checkered pattern will appeared when it froze. Theres nothing else to do besides restart but it freezes every 5 to 10 minutes. I also gotten 3 red lights 2 times randomly although it goes away after restart, but it still freezes. Just notice the xbox would also vibrate a lot when froze.
So i checked my friend Google for advice to fix freezing xbox 360s. Theres one towel trick, tried it and it still freezes. Theres the hanging power brick on strings/box and that didn't work either. Checked the Microsoft troubleshoot page and did everything, including xxLBRBxx trick. When taking out my hdd it would still freeze. It freezes in dashboard and in game too.
I also modded my xbox 4 months ago for backup. They flashed it as far as i know and i somehow go to live. (I logged on to live to get the free arcade game as well as updated my xbox and a few games.) Just so you need to know, i used my 1 month gold free trial for GoW and then stayed silver till now. So i don't know whether you need to be live playing game to get banned. But i am not banned anyhow. I just have no idea what firmware they flashed it with.
I called the shop that modded it and said they said that they can't fix freezing xboxs so i should call support. I am in doubt because they did open my xbox so i would probably have to pay for warranty. I don't know whether i need a clearly unripped sticker to accept because mine is a bit torn. Its still sticking on and technically in 1 piece. But the modding guy put a length of tape on 1 end of the sticker probably so that it doesn't stick when he opened the box and mod.
Heres a picture of how it looks like

Thanks for hanging with me for this far. So what do i do?
Do i send it back to get a refurbished? But the guy said that they can't mod new xboxs. Can it be done? How? Judging from that photo, does anyone know if they will accept my xbox for fix or trade after warranty (i am aware of the cost after warranty).
Thank You for your help!