I don't think the camera is broken to begin with.
The orange light next to the exposure dial suggests the correct setting of the dial, it isn't supposed to change when you turn the dial. You just have to turn the dial so it matches the light.
The correct procedure is to point the camera in the direction of the subject, then turn the dial to match the light. Also, on the front of the camera next to the flash window there are two small round holes, be careful not to cover these with your fingers when you hold the camera: these are the light sensors, and they cannot work correctly when they're covered.