i had exactly the same problem turn on yellow flash then red flashing and blue light on and off... so i opened my case 60gb bc and took the top case off and put it back on and bobs ya uncle no probs then, i think its might be how the top case is sitting try it without fixing screws down as it took me 2-3 goes for it to sit right on.
i also lifted the little contacts under power on button a millimeter this only happened after i replaced a faulty bluray drive but it was ok before i changed the drive so i assume it was how the case was sitting and it worked... gl
Even with a bad blu ray the system should still be bale to make it to the XMB. yellow and flashing red usually mean a YLOD from what you have described. the fat PS3 i have with a bad laser isn't even in the case and it boots up with CFW on i. You may want to look into a reflow of the CPU/ GPU chips on it. there are plenty of how to's on YouTube. One of the best i have seen is the one by Gilksy.
Here is a link for the first tutorial. it shows the light issue you were describing. take a look and see if its similar.
If you bought it faulty did you consider a disk may be stuck in the drive and that's why it blinks blue for a second? what model PS3 is it? you can do a fan test on some of them and that will sometimes make it spit out the disk.
has the console been opened? it could be the top casing is not on right it happened to me. i changed a bluray drive.. i switched it on it played ok then turned it off went back hour later switched on then yello/blue/ red blinking constant... this only happened as i bought second hand one from ebay which had been opened and drive was dead and i swapped it out.
also i looked close at the eject and on/off touch pad contacts underneath to see if they was lifted or lowered, the on/off was i touch lower (a mill) so i raised it a touch but it took 2/3 goes to get it right... at least have a check can't hurt none... hope you sort it.
Edit: my bad... it did not keep blinking but turned off like back into standby so same as your light order above, its like it don't get to the boot stage just shut off. i had a look at reflowing and thought argggghhhhh so i just took case off and replugged drive (as i bought new one) and put case on still went to standby...
now i was getting pissed so did it again and took time with putting case on and ... happy dayz so i think it was how the case was seated. wouldn't hurt to double check as there are fine catches on top of case and need to be seated correct or no joy... think thats the best i can help you... good luck
oh and clean the contacts i used a dry bit of toilet roll and just wiped em, everything can get in them especially if they been opened and are quite old like a release 60gb.