The blue Air Condition light flashing on the ECC (Electronic Climate Control, equipped on '88 and later 760/780/960 vehicles) indicates that the climate control has detected a "critical fault" within itself and is no longer able to perform adequately. This is it's way of saying "something's wrong and you should take me to the dealership now." However, if you have the 700/900 climate control service manual, it shows you how to extract the trouble codes from the climate control system and then look them up in the chart.
However, I would suspect that the problem with the climate control system is that it didn't have enough vacuum or an inconsistant vacuum supply (since the engine was idling so slowly). This might have been enough to trip the "alert" that you witnessed. FYI, the ECC operates independently from the Fuel Injection System, and they do not interact with each other. Also, the ECC has no internal memory built into it, and as soon as the car is turned off, all of it's trouble codes are wiped (unlike the LH-2.4 Fuel Injection system which will remember it's codes until manually erased or the battery is disconnected).
Regarding the "Check Engine" light on your dash: use the instructions in the 700/900 FAQ to extract the trouble codes. This should give you a better idea of what you're dealing with. (The instructions are also detailed quite well in the 240-Haynes book. The 700 series Haynes book did not get it's final update and is missing the info on the later cars.)
Also, don't forget to post what year car you're working on and what engine you have. I'm guessing that you have a '90 or '91 780, and probably have the B230FT (since I don't think the B280F engines ever came with the FI diagnostic unit, and you mentioned piston slap). If you do indeed have the B280F, then you probably don't have a Fuel Injection diagnostic system, and only will have an simple system built into the EZK ignition system (which also does not have a memory after shutoff).
God bless,
Fitz Fitzgerald.
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'87 Blue 240 Wagon, 269k miles.
'88 Black 780, PRV-6, 149k miles.
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