Problem: S/PDIF light flashes.
Solution: Evidently the box is set to look for a sync signal on the SPDIF jacks. I looked to the MBox control panel in the system prefs that found that the clock was set to Internal. Hmmm. Still flashing. Open Pro Tools. Switch Playback Engine to MBox. Open Hardware Setup. Clock Source was set to S/PDIF. This setting is intended to be a default cue for new sessions. In my experience, it doesn’t seem to ever work. Nevertheless, I changed the Clock Source to Internal. S/PDIF light stopped flashing. Case closed.