Can you post a scan of an offending print?
I can't see it being anything to do with the CIS, but it might be some other problem with ink flow from the carts.
The red light might mean the printer is calling for service (waste ink pads full, perhaps? -- this happens to all consumer-grade Epsons eventually.)
On the one that's working, try switching it to uni-directional printing mode and see what the result is.
Edit: Just checked the 1280/890 service manual -- if both error light and power light are on (blinking, perhaps? the instruction is somewhat ambiguous), ink pad change and counter reset is called for.
A thought on the spurious lines in high quality prints -- in text and plain paper modes less ink is delivered and the heads move faster.
Maybe the wiper isn't cleaning excess ink off properly, it's building up on the surface of the heads and coming off onto the media instead.