Apple has begun repairing or replacing some Time Capsule units that shut down unexpectedly or fail to turn on. The Units manufactured between February and June 2008 are potentially eligible for the program.
“Some Time Capsules sold between approximately February 2008 and June 2008 may not power on or may shut down unexpectedly after starting up. Some Time Capsules with serial numbers in the following range may be affected: XX807XXXXXX - XX814XXXXXX,” Apple states in a Knowledge Base article. “If your Time Capsule falls within serial number range above and it does not power on or shuts down unexpectedly after starting up, it may be eligible for repair or replacement.”
Customers that are experiencing power issues can set up a Genius Bar appointment at their local Apple Store, contact an Apple Authorized Service Provider, or call the Apple Contact Center for help with their Time Capsule.
Apple is also working with customers that paid for Time Capsule repairs or replacement. More information is available at the Apple Support Web site.

Jeff Gamet
11” MacBook Air 1.6GHz dual-core Intel Core i5: $999.00 Delivered

My Time Capsule 1GB original model (serial number XX809XXXXXX) failed at the end of June after 2 years and 3 months of use. I called AppleCare (it was covered with my MacBook Pro purchased at the same time). They replaced it free of charge.