I found you because 10 minutes ago, my camera exhibited the same behavior as all yours. All of a sudden, the red and green lights started blinking on and off and nothing worked. I just tried switching batteries and the camera is working! I am using a couple of RCR-V3 Li-ion rechargeable batteries, which I purchased on Ebay three months ago. Thought I'd pass it on.
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No I did not fix my camera problems.
I haven't got the extra cash to pay for an answer for the problem, so I guess it'll just sit and collect dust.
I'm in shock that I came to Olympus for help and they want to charge us for help when their products go wrong.
There is a "quick" button located on the back of the camera just for flashes. It is the first button to the right of the power button and it looks like a crooked lightning bolt arrow that points down. If you are in any picture taking mode, push this button and it will toggle you through each flash option, auto, red eye (eyeball symbol), flash (same symbol as the button, this mode will make the flash work everytime you take a picture), red eye and flash, and no flash (careful, in this mode you have to allow for the camera to focus, the lens will stay open a long time in a dark atmosphere -- if you don't hold the camera still you will get a blurry picture).
Hi. Mine did the same thing one day. I took the memory card and batteries out and let it sit for a few minutes. I then replaced the batteries, but it said, "batteries empty." I then replaced the batteries with silver and blue energizers. It powered right up. I was afraid it was a gonner, but it's been fine since.
Are you sure you finalized the firmware upgrade procedure according to the instructions?
This sounds a little like you pulled the plug a little too soon...
Have you done it according to these instructions: http://www.olympusamerica.com/cpg_section/OMfirm.asp
And kept the camera connected until the update was 100 % complete?
If you did everything right, try reseting the camera - take the batteries out for the day, and see if it helps. if you're back to step one(the reason you did the upgrade), try the firmware upgrade again. If still it doesn't work contact olympus, and I hope you have a valid warranty.