You most likely have a broken stepper motor or linkage on the heater box.
The flashing light is an indication of a failure in the control system.
I would take it to your dealer soon for diagnosis.
Regards,
Dr.D

__________________
Dr.Diesel -
Shop Foreman
Master Guild Mercedes-Benz Technician.

Think the dealer is expensive? Do you know how much it costs to train a dealer tech? Or buy the required MB special tools to have on hand?