You say the computer worked fine until you took out some ram that never worked. Well, put it back in - problem solved! lol
What OS are you running? I'm guessing you either don't have enough ram to start 3.9 or you have a scsi conflict/corrupt HD. My 2091 card does not like it when the GVP combo/scsi board is in. Takes FOREVER and a day for the system to boot when both are installed and 'on'. I believe that slow flashing HD lights are signs of a bad HD or conflict with something else.
BTW: If you see the 3.1 startup screen asking for a disk - chances are great that your KS chip is just fine.
Oh - if you're still trying to use the Fusion 40, you've got to make sure you've got the right setpatch/040 drivers installed... without that, you'll experience exactly what you're describing. And taken from Amiga-Hardware.com, says there must be 4mb of ram in the lower bank in order for the card to work properly...
Are you trying to boot the system with the 040 card or just the 68k?