The flash means that there is a problem with the system. Lots of the time the accuators on top of the shocks are stuck. You can take them off and lube up the post on top of the shock and manualy turn it back and forth to loosen it up. then put the accuator back on. There should be somehting in the FAQ section about how many blinks mean what. Hope this helps you.
If it doesn't seem to be "flashing", but just clicks on when you flip the switch, then turns off right away, try cleaning the contacts on the switch itself. If it is flashing the codes, do a search on this board and it should answer your question.
Regards,
TBSCoupe
My XR7 does this also. When the switch is set to firm, the light stays on but when its at normal it flickers, and i can hear the relay clicking in the back.
I rechecked this with the 90 shop manual. If you have a problem with the system, the green light will flash. Moving the switch from one setting to the other will clear any intermittent codes. If you still have the flashing light, here are the codes for you. I hope this helps.