Honestly, my first thought was low battery, but I'm wondering about what the LED might indicate. If the marker turned off after pressing and holding the power button, you probably held it in a little too long. Try again, and hold the button just a little shorter.
The LED switching to flashing red could indicate that the board is switching to eye off mode. I'm basically seeing if we can get the eye to turn on again.
Having said that of course, if the eye did turn off, you would expect the marker would actually fire under a wider range of conditions than with the eye on, not stop firing.
Could the red LED actually be orange? Orange would be the low battery indicator.