Both red and blue led of ESP8266 stays on
If you have too, you can find the firmware for the ESP8266 here and re-flash it.

There's some good info here about the instruction set.

With respect to your issue of the blue (traffic) light staying on, I can't imagine that the baud command would have caused an issue. Perhaps you need to double check your circuit and make sure that the Rx pin of the ESP8266 is not being held high.

What happens with only 3.3V and GND connected to the ESP8266?

Also the output you're getting is similar to the output from “AT+GMR”. Are you sending it that in a loop by chance?