The power light and the paper light are blinking continuously.

Turn off the printer open the lid move the cradle back and forth then move it to the middle, close the lid turn it on let it warm up and open the lid the cradle should move to the center, it sound like the home position senser might be going out or it is just ouot of wack.

When the power LED and the paper LED are blinking continuously it means that the printer has jammed or stalled. Look first for paper jams - open the rear access door and the top door to look for paper out of place. If no paper is found, check that the head (cartridge holder) will move by hand. Disconnect the power from the machine for 5-10 minutes and then reconnect and turn the power on. If the machine goes through the cycling of the LEDs, open the top door to see if the head will move to the center as it should. If it does not the chances are that whatever is causing the stall is hardware related and the printer will not be worth the cost to repair. You could search for any physical blockage by taking the printer's top case off and checking around the mechanism to find any simple problems. The most likely is that the electronic to mechanical interface is failing - sensors, etc.