The red ring of death is 3 rings, not 4. This way isn't good, it will make the xbox work for about an hour, then cut back to the ring. I would just ring up microsoft and get it shipped off, atleast you know it's in good hands.
The Way It Works:
The towels around the 360 make it unable to recieve cool air, so the screws on the motherboard are melted, briefly to make it able to fit into the holes, once the xbox realises that theres something wrong with the hardware, it shuts down. Giving it time to cool, hardens the screws and they become back in place, which then makes it working again. After a few hours, the screws once again become loose and the process would have to repeated, time and time again.