Think you have the right idea but the wrong solution. However, you are not alone. Whenever there is a High Limit issue the first thing many people believe is that the sensor or switch is bad rather than that it is doing exactly what it is meant to do!
The flashing light is telling you is that one of the sensors is reading an over temp condition. While a bad sensor is a possibility it is seldom my first choice. Since a high limit failure is a safety issue, I try to convince everyone to believe that the issue is "real" rather than caused by a faulty component.
First check the water movement. It may not be moving enough to exchange heat in the manifold correctly. This means that we are heating without the pump on or with insufficient water flow. Secondly, check for a bad device, which should only be considered after you have verified that water flow is not the issue.
Typical causes for improper heat transfer include:
1) A dirty filter. Easily verified by removing the element from the canister and running the unit as normal. If the unit no longer errors out that's the problem no matter how "clean" it looks.
2) Closed or broken valves. You would be surprised how many people just forget to open the valves after servicing. Some slice valves can also become loose and slide closed due to vibration.
3) Too many adjustable jets closed down to minimum flow.
4) Clogged or broken pump impeller.
5) Air lock in the plumbing.
As you may have guessed by now the common thread in this situation is poor or no flow. Because they can see the water moving many technicians dismiss this as the actual issue. I like to use the "touch test" to determine whether you should worry about this. If the manifold is hotter to the touch than the water in the tub is (on a single two speed pump system) then you have a flow problem! This test does not work for "circ" systems where the low flow heaters often feel hotter than the tub water. Fortunately most of these systems will have a "flow" error if this issue exists.
The second part of this issue is just as often overlooked and specific to units like Balboa that only break one leg of the heater current for temp control. Heating with no pump at all sounds ridiculous but can happen if the output device fails "on" (stuck contacts on relays or contactors). Check for voltage reaching both heater terminals at the same time with the pump disconnected and the thermostat turned down. If voltage is present replace PCB or output relay.
There is also a little understood condition that happens when an element has a short to ground and one leg of heater voltage remains connected. Now we would hope that the GFCI would see this and trip off. However, I have seen this situation cause the OH or flashing LED issue more than once when the GFCI did not indicate any problem at all. As long as the power consumed does not exceed 5ma (60watts) you will never see a GFCI issue but 60 watts is more than enough to cause an OH in a small, enclosed manifold with no moving water. The GFCI can also be bad but that's another issue. Check the heater for a short to ground by using a meter capable of reading in the 20-30Meg Ohm range. Measure the resistance between the heater terminal and ground (the metal manifold, nut or plate that holds the element) you should get no resistance at all (i.e. the 1 on the left side of the display or OL on the meter display). Any actual numbers at all indicates a connection to ground and a bad element. and that can cause the OH problem. In any event if you have a shorted heater it must be replaced.
That is probably more info than you ever wanted on High Limit failures. Hope it helps.
Nuf Sed - Willie