a blue blinking led means in many cases a disk problem, it can be just a corrupt file but also a more serious problem (disk failure)
From what you describe on loosing contact in steps doesn't promise any good.
I guess you have the standard lacie firmware running then there is little you can do to investigate
You try to use our standalone kernel that runs from ram and can be loaded externally without taking out the disk
With this kernel running you can check ou the disk and maybe repair the problem
more info http://plugout.net