Red LED means a fault… Could be a poor network connection; have you tried a different cable & router port?
Could be overheating; are the vents clear? Have you checked the Dashboard for alerts? Have you checked the device status with the Dashboard, or run the diagnostics?
If you think your original HDD is dying, why do you want to move it to the new device?
If both MyCloud devices are the same generation (running both running either v4 or v2 firmware), then, yes, you should be able to put the old disk in the new drive, if you suspect the control board has some failure. It will void your warranty, of course.
Since you mention needing a ext2 file manager, I assume you have already taken the disk out of the first drive. In which case, see this thread:
Yes, it will take time. But your computer will do it for you; just leave it alone to get on with it. It will be preferable if you have a gigabit network.
