Measuring the frequency of a square wave with input capture Atmega328 avr
Use another timer and set it up to expire after a period equal to the period of the lowest frequency you intend to detect.  For example, say you want the "no signal" LED to light when the input frequency is less than 1 Hz.  Then set the period of this new timer to 1 second.  Anytime an edge is detected, reset this timer's counter so that it will expire in 1 second.  This way the timer will never expire as long as you're getting edges more often than once per second.  But when you don't get an edge within one second than this timer will expire and in the timer's ISR you can light the "no signal" LED.