This just happened to me today
Yup, my 360 broke. I was playing Dead or Alive 4, and on the 3rd match, I was Kasumi, playing against Christy, and my 360 froze. So I ejected the game and turned off the console. I turned it back on the first time and got no response (no lights). I turned it back on again, and I got the results shown above. I waited a little while, turned the 360 back on, and it ended up working. I decided to play DoA4 again, and the game ended up freezing on the first match, with me as Kasumi playing against Christy again. At first, I just thought it was Team Ninja infecting my 360, so I played Ridge Racer 6. RR6 seem just fine, but on the countdown, I heard 3, 2, and then the console froze, where I could see a 2 and a 1. I just ejected the disc, turned off the console, and that's it.
MS is now 0/2 on consoles, since my Xbox gave me tons of problems (had it repaired twice, and it still gives me problems now). My Sony consoles/handhelds continue to work flawless (and I even play them more) and never had a problem with a Nintendo console/handheld (other than the NES).
My 360 is eligible for free repairs, but I'm kind of pissed because it's going to take a while to get it fixed (I live in two homes right now, which makes shipping stuff difficult). I was looking forward to renting a few games (like Gears of War, Sonic the Hedgehog, etc.), but now I can't. I'm probably never buying another multi-platform game for my 360, since I had to do that with my original Xbox, due to so many problems with it (where I bought them for PS2 or GC, even if inferior, since they would at least work every time).