Steve--

Unless I'm mistaken, the light is a low level indicator, not heat.  If
your levels seem okay, you might try cleaning the connectors at the
sensor and/or checking the wiring.  If all else fails, you may have to
replace the sensor.  As fellow listees were so kind to point out to me,
the level sensor is the one sticking in the top of the expansion tank
(left back corner--not one by license plate hole).  As I recall, a weak
antifreeze concentration can also cause the light to blink because the
coolant won't be as good a conductor.

Good luck!
Tonya
87 Vanagon GL Wolfs
74 S. Beetle