Service hybrid system?

That message could mean many things. On a hybrid you can have all of the "problems" of a gas powered engine and all the issues of an electric car as well. Service Hybrid System usually points to a problem on the electric side of the system, either a battery or controller issue. However, with the check engine light it could be an engine issue that is causing both indicators to come on. The only real way to know is to use a scan tool and pull the code(s). Then use that as a guide to determine where the fault is. The catch with hybrids is that the electric side of them generally requires a dealer or very well equipped independent to work on them because of all the computer controls that you need a scan tool to talk to as you test. The first step though is to get the codes.

GINO09 Could you add your vehicle information please? One of the issues with all the hybrids is the dual systems make diagnostics difficult. On a "normal" vehicle it is easier to tell someone to "look at this part and measure this" On a hybrid doing that could get someone seriously hurt if they touch the wrong parts.
In your case I doubt they lied to you. More likely they saw the error code and it pointed to the battery and that it still has a problem related to that side of the system. There are no "simple" repairs on a hybrid.

Just wanted to verify if it was the same type as the original post. We get quite a few people who will ad to an earlier post but not have the same type or make of vehicle.
From your description the problem sounds like it is in the charging control and voltage regulation system. Not a system that I like to play with as it carries lethal voltages. The pulsing lights would be due to the voltage surging as the system tries to regulate itself. Unfortunately testing that system requires some very high dollar equipment so it isn't a DIY thing. If you don't trust the dealer you might want to try a different shop for a second opinion. They can do some hands on testing to verify the problem.

Sorry I'm not more helpful but without the proper scan tool to actually see where the issue is I wouldn't have you start testing on the system like I could. The codes in the system can provide a good starting point.
Do have a related question, you said you had the battery changed? Which battery? Your vehicle has a total of 4. There is one under the hood that is just the starting battery. Then there are the hybrid battery cassettes in the 36 volt system themselves. You might want to run your VIN number to see if those were replaced under the recall GM had for them cracking. Plus there was another one for the greenline versions that also was hybrid battery replacement for 8 years/100K miles.
You might want to call GM customer service and talk to them about your concerns and see if they would help you as a goodwill gesture. 1-866-522-9559

Yep, that would be the three batteries used for the hybrid system. You might want to have the under hood battery tested, if it starts going wonky it can cause issues as well.

That is a power regulation issue. Not caused by the battery itself, but it can damage a battery if it continues. Plus it is still happening after the battery was changed. A scan tool that shows live data would allow you to look at the charging system and see if it is an issue on the 12 or 36 volt side of the system as they are somewhat interconnected.

Any charging fault will cause an error that can trigger a warning. A good scan tool can read the codes and at least point the way. The problem that sets the codes will also trigger different actions depending on what that fault is in an attempt to minimize damage if possible. In your case lets say that the main charging system has a bad part causing the charging voltage to rise and fall, this could damage the controller and the batteries so the programming sees the fault and takes the hybrid drive offline to protect it.

It kind of sounds like the battery is shorting out internally but this is difficult to find, maybe you should try to swap it out.

Glad to hear the battery helped. I just hope that is the real repair. Loss of power from the battery may have shut it down, but if the charging system is still iffy it might not last.

With hybrids, you pay a premium up front to buy one new, then you discover that you not only have to pay ridiculous prices for parts but also that because you have what amounts to two different drive trains in most of them, you get to buy twice as many parts.

Sounds like it may have worked then, good to hear that. Any thoughts on the replacement?