When testing a WBA, first turn on Dip switch 8 and then apply power. Then proceed to which ever test you need.
Turning on 7 and 8 before applying power is actually putting the unit in download mode at 9600 baud. Turning on 6, 7 and 8 is 19200 baud and 1,6,7 and 8 is 38400 baud. The 9600 baud setting is hardly ever used since the DT101 and 104 came out, but it is still in the programming of the CPU. The rapid flashing is an indication of communication and the speed of the flashes will increase when you select a faster download speed.
When going into test mode, after turning on 8 and then applying power, you should see the LED closest to the dips turn on first , followed by the second LED a couple seconds later. This is an indication that the software has passed a CRC check. If the second LED doesn't come on, the software program is corrupted and you need to re-download. Once both LEDs are on, your ready for diagnostic testing.