Three blinks is a problem with the smoke unit fan, it seems Lionel has gotten a bad "batch" of these fans in the last couple of years there have been numerous posts with the same issue.
I've had the same problem with my legacyk4, fan was noisy out of the box,oiling made it last another year then it quit altogether and I got the three cab light blinks.
I decided to fix it myself as a replacement fan is a fraction of the shipping to Lionel. The new fan makes almost no noise and the shutdown/three blinks resets automatically the instant the problem is fixed.
If your comfortable tinkering, replacing the fan will likely fix the issue, if not, contact Lionel via email at the "service/repair" question topic on this link:
http://www.lionel.com/ContactUs/