I too, recommend the towel trick strongly.
The first time did it, I had very limited success, about fifteen/twenty minutes before a crash.
After the first time, I went to do it again. Coincidentally, I had moved the power supply to a completely different shelf, over some concern it had given me. When I powered up the system and left it for fifteen minutes with nothing inside, I came back, and it still felt colder than room temp. So I opted to put a game in, crackdown, to make the sysem work a little harder, and generate some real heat. I played for a few minutes to make it crash again, and was surprised to be standing in front of my tv for about fifteen minutes without a single hiccup, glitch, or crash. Then my wife jumped on for a bit. Three hours later, only the rear exhaust fan was even warm, but still not what would qualify as being remotely 'hot'. The system ended up going all day from morning to night, without being turned off. It ran perfectly with that towel on.
It may have been more related to the power supply; but I'm hesitant to conclude that; because I did try the system after moving the power supply away from it, without a towel, and it ran for about two minutes before I got a freeze and another error 0102/0110(They've been found to be much similar, in some cases the same). I'm going to try it again, without the towel, and see how it works. I'm also going to make a point of not getting too caught up in it, because it may or may not work for more than an hour, lol.
Anywho, my point is, trying the towel method longer, or (in some cases) permanently may still help your situation. If you're out of warranty, and you're smart enough to keep an eye on the temperature, what have you got to lose?

"Its not stupid, its advanced!" - The Almighty Tallest, Invader Zim
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