I had the Red and Green light on my Immobiliser on my Phase 1 1996 D Turbo.
I rang up Peugeot and they said it will cost alot to fix so it isn't worth doing. Me being me (Stubborn), I got the old 306 on a ramp, and had a look at the wiring loom at the N/S/F next to the radiator under a flap.
Luckily I found two wires were split/slightly corroded. I connected the two wires together, cranked the car and she started!
As soon as i'd done that I quickly disconnected the immobiliser and I don' have to use it again.
I hope this helps someone with their 306.
Marcus
March 2011