Hi there F_Underwood!
I have a couple of articles for you that will help you troubleshoot your iPod shuffle. First, an article about those little blinking lights:
iPod shuffle (2nd generation): Understanding status light behavior
http://support.apple.com/kb/HT1407
According to the information you've given me, it appears that your iPod shuffle will have to be restored. In order to do that, we will need to follow the instructions in another article, which can be found here:
Restoring iPod shuffle to factory settings
http://support.apple.com/kb/HT1481
Thanks for using the Apple Support Communities!
Cheers,
Braden