I have no experience with these battleswitch things, but I can give you a place to start (apologies if you have already tried something).

It looks like a flashing light means no signal from the receiver. (see link below)
http://www.lynxmotion.com/images/jpg/de01.jpg

I would have a look at the signal with an oscilloscope.
If you don't have a scope, plug in a servo to check the receiver is working. If the servo is working as expected, plug in the battleswitch to the receiver and check the wiring to the battleswitch (if there are LEDs flashing, there must be power so check the signal wire carefully).

Could you give us a link to what you have? I just want to make sure I am looking at the right thing.


ps. If you haven't already, you should use a flyback diode across the solenoid to stop voltage spikes. This doesn't really help with this issue though.