The flashing lights you describe probably was the firmware flashing (which probably was not necessary). To properly do the firmware flash, you are supposed to turn off the radio (the procedure is on page 46 of the Phatbox manual, if you have it). I think if you don't turn off the radio, it could stay in a firmware flashing loop, which could be why the cycle was repeating.
You can try it again according to the procedure, or put the DMS back in your cradle, and open the phtsys partition (don't start the MM software). If there is a file called "foreceupdate," delete it. Then take it back to the car and see what happens. If it still doesn't start to work, disconnect and reconnect the cable from the back of your phatbox. That will reinitialize the connection between the box and your radio, and if your DMS is good, it should be recognized.