Had client unplug the HDMI cable and turn "system on" as usual (via RTI, turns on tv, avr, etc.). The Sony didn't blink red.
Now for the actual scenario. This "red blinking led" only comes on the first time system is turned on, after "cooling down for a long period of time"/ overnight. Then client presses system on again and things work fine. He can turn system off for a "few" minutes or hours and come back and it will turn on without any blinking led.
So troubleshooting is a tough one, only one shot, first time it's used for the day.
But, at least it seems not to be the TV, something down the line.....
Going to have him turn the TV on with factory remote tomorrow (with HDMI connected) and see what happens.