Had this problem with my machine. I rang the Telstra tech help number. The flashing light means that the message storing area is full. Deleted the stored messages and everything is working okay now.
Monaro August 2010
check your actual messages via the handset. it is probably full
john_gorton July 2010
If you enter in to your TAM Settings, scroll down to Auto Ans & switch it off, this should stop the the red light from flashing. You will have to reset your OGM. This is what I did & it seemed to work. Best of luck.
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