I believe that is the voltage regulator.
you would need to check the output 5v pin and GND pin.
remove the IC and solder the the 5v and GND pin.

Hi, can you give me the model name of the RED IC?

Try to measure if it have 12v in onde side and 5v on the other side.

Yet another board design (for the 3.5" screen) http://i.imgur.com/ZETl6Gj.jpg http://i.imgur.com/7shmm6j.jpg http://i.imgur.com/6MzIbFw.jpg I went with the previosly posted method and it works flawlessly. my config.txt is slightly different though overscan_left=20 overscan_right=20 overscan_top=-20...

Does RaspBMC continues to be deployed?

Thanks!