The flashing blue light can mean only one thing (well not really), Nintendo has put out a firmware update.
Firmware 4.2 is said to include behind-the-scenes improvements, one of which makes older game discs run more efficiently.
On the negative side for some, the update also completely removes the Homebrew Channel.
‘Twilight’ Director Catherine Hardwicke Tells Behind-The-Scenes SecretsSystem Update 4.1