So I had a weird set of issues last night with guiding and I have no idea where to start debugging them.
I had polar aligned the EQ6 within 10 arcseconds and went to start guiding for the camera.
The guide set up consists of a 50mm guidescope with a ASI120MM camera aligned to an ED80, all controled via EQMOD and PHD2.3
This has been a setup Ive used many a night before and no settings were changed.
However, last night If I enabled guiding, PHD would pulse constantly E for a couple seconds, then W for a couple seconds. To the extent that even on a 15 second focus shot via the ED80, there was massive star trailing. If I turned guiding off, I could do a couple minutes without much issue.
I get this issue when stars are at the limits of detectability, and so the screen gamma keeps getting thrown off. Try changing exposure to Auto, or set it to a long period (e.g. 5 sec) and see if you can find a clear guidestar to lock onto. This should stop the flashing. You can also try mucking about with the exposure setting in the ASI120MM driver.
Have you thought about using Metaguide? It is generally more suited to the ASI120MM (fast captures at 5-10 fps with integrated centroids), and is what I typically use with this guidecamera. A really great bit of (free) software!
I use Metaguide now with my ASI130 and its great. I never had any luck with PHD2, it kept dropping out of guide mode with no error message. Metaguide (latest version July 2014) now has all the config for the ASI cameras.