Valve Debunks Panic Over Steam Machine Red-LED GPU Failures

Specifically, user u/me_hill on Reddit followed up on his original thread with a comment explaining that the Red Line of Death had resolved itself by just being kept unplugged overnight. This would be a highly unusual way to fix a GPU failure, but as a Valve employee in the same Reddit thread soon explained, that's because it was in fact not GPU failure at all.

The Valve support account named u/SteamHWSupport explained that the the out-of box LED error codes were actually mirrored. The key on Valve's site, which corresponds to the right side being lit indicating GPU failure, is only accurate after a BIOS update. Out of the box, the so-called Red Line of Death on the right side only corresponds to memory testing, not hardware failure. Since this user only encountered the issue shortly after booting the Steam Machine for the first time, the BIOS update had not yet applied to prevent the error being misread.
It's a strange outcome for a story like this, but certainly a relief for everyone involved. The original poster no longer has to worry about a lengthy RMA process, and Valve doesn't have to worry about paying for a mass GPU defect in its Steam Machines. Prospective buyers of the Steam Machine must also be relieved, though some may already have been tempted to go the DIY route or pick another prebuilt.
While fears of the Red Line of Death have been alleviated, there are still concerns about the Steam Machine being priced poorly versus the competition or its RAM being locked to single-channel. Those concerns are quite valid and are unlikely to go anywhere until industry conditions improve, and no one knows when that will happen yet.