As soon as you said 'flashing light'......
There is a small transponder chip inside the key, which works the immobiliser.
The chip is only about 5mm by 3mm by 2 mm, usually black or grey.
If the key split open when you dropped it the chip has probably fallen out. It might be worth having a look around where you dropped it.
If you cant find it, new chips are not expensive but will have to be coded to the car using diagnostics.
Old chips which have been coded to another car can not be re-coded so watch what you buy.
If the key did not split, open it up and make sure the chip is seated correctly.
If you still have a problem it might be better to start a new question, as things tend to slip off the bottom of the page on here.
vaux
November 2010