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The constant flashing is an indication that the valve may be going bad (or at least the diagnostic function is faulty). It might be advisable to look for a replacement while it's still working. If you decide to replace it your best bet would be to locate a Ruud distributor nearby or call Ruud at 1-800-621-5622
The the water come from the pressure relief valve? If so, the valve may have stuck open and overheated the water.
The continuous flashing is what tells me that the valve is (or thinks it is) in need of replacement.