Hi,
The only thing I can think of is to try the "reset to factory defaults", assuming you cannot get to the interface, use a paperclip in the "reset" hole on the back of the unit. With the unit power on, hold it in for 10-15 seconds and then release. If you still get nothing but the blinking after a couple of minutes, I would think it is either the unit or something with the hard drive. You could pull the hard drive out and test it out in a windows machine. Here is the sticky for data recovery, http://forums.dlink.com/index.php?topic=41306.0 , if you are using Windows, in linux, you should be able to just check it easily. If the drive is ok and your 321 keeps blinking, I would assume you had a bad unit. If the reset works, you will have to re-enter your settings, but the data should be ok. Good luck