You were right: you can't perform red maneuvers while stressed.
In the event that you reveal a red maneuver while stressed, you give your dial to your opponent so they can select a legal move for you to perform.
Multiple stress tokens?
The following passage appears three times in the Rules Reference. It's under Activation (p4), Difficulty (p10) and Stress (p18):
A stressed ship cannot execute red maneuvers or perform actions. If a stressed ship reveals a red maneuver, the opposing player chooses any non-red maneuver on that ship’s dial for that ship to execute.
It is designed as a penalty for when you forget you're stressed and make a planning error, and I'm sure it's seen many ships suddenly veer off the table.
thanks guys. I was pretty sure I was right but I didn't know about the penalty. good stuff.