Thanks Ifor trying all those steps, you may be thinking, why I am asking you to try the same steps, again and again. That is because, I want to make sure of the exact fault, if it is the sponges or any other sensor is causing this problem or not.
After seeing your reply, it seems the problem is the door sensor, which is defective and that is why the printer do not know, when the door is close or open, due to this reason, when you open the printer cover, the cartridges do not move to the replacement position, where as you can slide them, manually.
The sensor is a micro switch, which get pressed, when you close the printer cover and vice versa, when you open the cover.
The switch can be replaced at home, but to do that, you have to completely dismantle the printer and for that, you will need the service manual, I can help you to get one, but I will only recommend you to do that at home, if you have any previous experience with repairing, otherwise you can replace the switch from any local repair shop.
Now, as flashing light only indicates problem with the printer, but do not define the exact cause, if you still wish to clean the sponges then, open the link below and watch the video to clean the absorbers and then follow the steps.
The printer shown in the video can be different, but the procedure is almost same for all the Epson printers.http://www.youtube.com/watch?v=FwylF5dHgY4
If the problem persist then, the sensor is defective.
If you have any further questions, please feel free to let me know, otherwise please remember to give rating and I request you that, do not give negative rating, as the problem is caused due to defective spare of the printer and I can only tell you, what is defective , as it is not possible for me to replace the defective spare.