A thought.. do you have the "rootsh" package installed? If not.. I guess whatever the person who told you red pill is the only way to go.. since you would need to download the rootsh deb file by hand and install it anyway since your Application Manager is not working.

Still baffles me this package is needed for root.

I do think a reflash should fix it.. if you wanted to go that far. Some settings are saved on a reflash, but I really highly doubt the repository lists & caches are.