Richard,
I had this issue. I ran the diagnostic tool and found nothing, I rebooted and it was still happening. I was trying to find a way just to turn it off altogether because it was so annoying. I happened to press Function and F7 (because I wasn't sure what that button did). A box popped up and asked if I wanted to turn on caret browsing. I said no, but the flashing actually stopped! This was probably just a dumb fluke, but thought I'd mention it, in case it helps you or someone else!