Siemens Simatic S7-300 interface troubleshoot

hi,
i was called in to help one of our customers with their PLC. it is a siemens which i'm not very familiar with. i typically work with GE fanuc or allen bradley. anyway, here is their setup:

main rack:
PS307 - power supply (120 vac)
CPU315-2DP - CPU
IM360 - interface module
SM321 - 24VDC DI (16 point) (there are 7 of these)

expansion rack:
IM361 - interface module (24VDC power)
SM331 - Thermocouple (8 point)
SM334 - 4 AI; 2 AO
SM322 - Relay DO (16 point) (there are 5 of these)

the 24VDC power was shorted out by accident and the unit stopped working. i checked the IM361 module PCB and saw it was smoked. replaced that and powered it on again. the SF LED turned on for both the IM360 and IM361. also, the CPU had all of it's LED's blinking simultaneously. i talked to the company's programming guy across the country and he said to replace the IM360 module and it should work. i also talked to siemens tech support and he said to replace the CPU and possibly the IM360. he said the blinking LED's on the CPU meant it was put into "panic mode". my customer is thrifty and i don't want to order an expensive new CPU if i don't need to. has anyone had something like this happen before or could offer any insight?

I've had a CPU314 in the past with all the leds flashing simultaneously. We could not communicate at all with the cpu so it was shot. The cpu had to be replaced.

I had a cpu which had 120v connected to the 24v dc line (Thanks, boss). It fried an analogue card and stopped the cpu communicating with my programmer, but the processor still ran.
Try communicating with the processor. If you cannot, then the customer will have to get his cheque book out!!!