Chances are if it's from an auction site then it's going to have a voided warranty sticker anyway. I've bought 3 off an auction site which I've managed to fix though - some needed some other tricks to remain stable (like a blasting with a heatgun which I now do as a matter of cause as the xclamp replacement alone won't last) but they're all still going strong. Here's some URLs to check out:
http://www.x-clamp-fix.com/catalog/product_info.php?info=p5_X-Clamp-Fix-DIY-Kit.html
http://www.danhrules.co.uk/3rlod/
http://www.llamma.com/xbox360/repair/ring_of_light_x-clamp_fix.htm
Personally what I do is strip the whole thing down, clean the old thermal gunk off then cover the plastic ports and capacitors up with tin foil, leaving just the scaler chip, southbridge, RAM, GPU and CPU exposed. Then I blast the whole board with a heatgun for a few minutes. I then let it cool down for half hour and blast the other side for a few minutes. Once the board's cooled down again I do the xclamp replacement using these bits from B&Q:
Machine Screw
Pan Head Slotted
5x10mm 10 Pack
AVF-853746
Flat Washer
M5 10 Pack
AVF-852398
A single 10 pack of bolts is fine as you only use 8, but I use 24 washers, so 3 packs of those are needed. I turn the board upside down and put one washer on each bolt and place it through each of the four GPU heatsink mounting holes. I then put a thick piece of card under the board so I can turn it over without the bolts falling out. You then need to take out the little screw in clips on each heatsink with either pliers or the proper hex screwdriver tool. Once they're out, I put 2 washers on each bolt, add fresh thermal paste and sit the GPU heatsink on top then slowly slide the board across the card until I can do each bolt up loosely with my fingers. Once they're all reasonably secure I use a small flathead screwdriver to do them up a bit tighter, but I've found it's best to simply use the force in my fingers instead of relying on my arms to do the work. I've seen many xclamp replacements where people have done the bolts up as tight as they can - this is not needed. Once that's done I repeat for the CPU.
I've revived 3 dead 360s I've bought cheap off an auction site and several for my friends. Out of the 12 I've done only one has failed and even then the problem wasn't 3 red lights, it just gets graphics corruption and eventually hard locks. Not a bad success rate though