i have played tropico 3 without any problems,
i think that your system is showing signs of a break down cuz the 3 red lights is a console issue like the red ring of death. if i were you i would make plans to either buy a new 360 or check and see if your warranty is still valid so you can send it back to be fixed , FYI any red light issue on your console more than likely means your going to need it fixed so either contact the company or buy another, if you do buy another try buying use from gamestop and getting a 1 year warranty with it, they will accept any return if it breaks within the year.