Hi all,
I too have been plagued by the blue flashing light issue with the DNS-320L.
I've read most of the other posts about this issue on the internet, but only in this thread I've found a real clue to what the real problem is (the post about the freezing on page 2). After many attempts to freeze particular parts of the motherboard, I've came to the conclusion that the problem is with the NAND flash memory chip (in my case a Hynix H27U1G8F2BTR, see the picture - it's the one I'm pointing at).
After freezing the chip with some pressurized air in a can, the NAS boots up just fine and works perfectly until a restart... I tried updating to the latest firmware, but since it doesn't solve the issue, I'm fairly confident this is a hardware problem. Unfortunately, none of my programmers support reading and writing NAND chips, so (for now) I can't say if the whole blue blinking lights issue would be solved with a new chip containing the backup from the original one.
In any case, I'd love to hear feedback in any form - if freezing this chip makes your NAS work too, if you have access to a NAND programmer and can make the experiment, etc. I'll continue looking for a programmer myself and will update the thread with my findings.