Peugeot 406 year 1997 key pad immobiliser?

Both lights, upper (red) and lower (green) light up every time the ignition is turned on, indicating some error with the key-pad wiring? At least that's what the manual suggest when both lights are lit.
Key-pad started acting like this after we put the code in wrong 3 or 4 times, before that only the red light was lit and key-pad beeped 3 or 4 times each time we inserted the wrong code.
Startermotor will turn, but no fuelpump or ignition activities.

p
November 2008