In my case, the network icon flashes whenever I have activity on the network. The DNS-323 stays hibernating even though the network icon (and my switch) LEDs flash. That network segment is pretty quiet at the moment, so I'm just seeing the heartbeat every few minutes or so (I have the DNS-323 on a segment without any users on that side of the switch - just storage).
For what it's worth - I'm also using WD Caviar Green HD's, though the 1T variety (added to signature).
-DocD