Hi
I have had the exact same problem.
I called INDESIT and they told me that two flashing lights mean "timeout on draining", meaning that the dishwasher has failed to drain away the water within a predefined timescale.
However if you restart the cycle and the water drains away as normal at the start, then there is no blockage and this is clearly not the problem.
This was the case with my dishwasher so I got an expert out to examine it. He said the water pump had gone. When it stalls in the second cycle, do you hear an intermittent buzzing noise? Apparently that's the water pump trying and failing to do it's job.
He also advised a new water pump would cost in the region of £140, so baed on that I have decided it's best to get a new one.
Hope this helps.
William Parker
November 2009