Hi Helen,
Couldn't find the manual for your unit online, but I know that connecting the "bigger speakers" to your unit shouldn't have hurt anything unless they were 4 ohm speakers (your deck will only work with 6 ohm speakers.) Without the manua, I am not sure about the red AV light, other than it should mean that the auxiliary rca input is active. You may have to check the source and check that the AV is "off".
The only other think I can think is that you should check to be sure NOTHING is plugged into the headphone jack.
Feel free to email me if you are still having issues. I will try to assist you in further troubleshooting.
sewellp@yahoo.com
Patrick Sewell, February 2008