It sure sounds like the PNP switch, I had mine replaced a couple of months ago. The problem can be temporarily fixed by turning your ignition to the 2nd position (but not with the engine on) and then shifting back and forth from park to drive about 50 times, this supposedly cleans the contacts but eventually you need to replace it.

A few weeks after the PNP switch was replaced in my car, the dreaded flashing arrow came up again but I didn't have the same problem with it being stuck in 3rd gear this time, turns out to be the Mode Selector Switch (the one that controls Sport/Economy Modes). You might as well change that too because they usually fail around the same time.