Hi Ben. Richard just had the bright idea
of looking in our Yamaha manual and sure enough it's in there! And it is the "Water separator warning indicator (operates only if the sensor has been installed)". It goes on to say:
"If the water which has been separated from fuel in the water trap exceeds a specific volume, the indicator will blink showing the need for water to be drained. NOTE: This indicator only operates when a water separator sensor is equipped".
If draining the bowls hasn't helped, maybe there's a problem with the sensor?