It has been a while since I played with these, but I'll take a shot at a couple things. First of all, if the armrests flip up and down each armrest has a simple (and cheap) micro switch that can easily get broken by the arm rests flopping down. I can't remember if both have to be down in order for the blade to function. If the arm rests don't flip up the lock out is grounded when the seat belt is connected. This would be the first place I would look. The flashing light on the dash I believe is a fault for the TCU (transmission control unit). I think you need a dealer tool to re-calibrate the transmission. I am not sure how you reset the transmission computer, but when you tried this you maybe have caused the fault and thus caused the flashing light on the dash.
In regards to towing the machine, you won't be able to tow the unit unless you release the parking brake and allow the hydrostatic system to loop on itself. There should be a port that allows you to pump the brakes down (there may even be a pump on board - I can't remember). There should also be a procedure to allow the hydrostatic system to loop so the tracks can turn freely. You won't be able to tow it very fast, but the tracks should turn and not drag on the ground as you stated. The local dealer should be able to look up the procedure for towing.
Good luck.