I'm willing to help but I'm on a data plan and won't open spreadsheets that size. Please post a smaller sample. Also, your profile says you're using 2003 but the attachment is 2007. Can you adjust that?

My first blind guess is that the conditional formatting is only applied to the cell that turns red. Check the other cells for the conditional formatting. If it's there, check the condition. Does it refer to the correct cell?