your problem is not with the red pill mode but with fulminati repos, it seems to have an error with Descent2. Disable this repos for the moment...
http://www.fulminati.org/maemo/Packages.gz is ok but
http://www.fulminati.org/maemo/Packages 404
maybe a mistake...

In this link it describes how you can manually enable red-pill mode
I would presume that setting a value of zero will disable red-pill mode (ie. enable blue-pill mode) - but no idea if it will fix a broken app manager.

I also had problems with fulminati.org, without ever playing with the easter egg. Also solved by looking at the application mamagers log file, then removing the troublemaker.

I guess it was just a matter of coincidence, though I refreshed my apps about 3 days before trying this.

Now, people had talked about a stripped down version of Maemo without all the bloat loaded in by default.

Can things like File Manager, etc be removed without effectively bricking the tablet?

Maybe someone just about to reflash a tablet for other reasons should try :-)