blinking amber light/internal disk needs repair
After having reset the time capsule with the button on back for 5 seconds/ light goes from solid amber to blinking.
But I get nothing except internal disk needs repair.
iMac, Mac OS X (10.6.7)
Unfortunately, this is not an encouraging sign.
About all that you can do at this time is erase the Time Capsule disk to see if that might help, but if the damage to the drive is physical, this action will not help.
Approximately, how old is the Time Capsule?
Are you still using OS X (10.6.7), as you indicate in your profile tagline?