Blinking yellow light on my Apple Time Capsule
Check out Tesserax's Answer on the Apple Support Communities.


      A persistent, flashing amber light indicates that any of the several potential conditions may require your attention:

  
  
  The base station has not yet been configured because it is new, or    the reset switch has been set.
  You have selected a security configuration that is not recommended.
  One of several other conditions, such as a disconnected Ethernet cable or invalid IP address has been detected.
     (ref: http://docs.info.apple.com/article.html?artnum=305101)
  
  If you run the AirPort Utility, it will show an amber circle on the summary >page next to the area(s) causing the
  
  
  problem. Click on this amber circle and it should provide an explanation.