A red flashing screen is usually the cause of a badly seated custom chip. On the A500 this was almost always the Agnus that needed to be reseated. Try reseating the Agnus chip it might be loose in the PLCC socket. Note the Agnus Chip is square , if you are very carefull and don't have a PLCC remover very carefully use a tiny Jewlers screwdriver to slightly lift the Chip at the 2 slotted edges. Do not apply much pressure, and then press the chip down again. If you can get the chip out check that all the contacts in the socket appear to be properly alligned.
Cheers
Shaf
