I think you should use the word "blink". Flicker would imply quick unevenly spaced flashes and conjures images of a short or broken wire. Blink would imply a steady controlled on/off sequence, which I believe is what you refer to.
The buttons do blink if they fail to communicate. And no, it can't be bad programming in ISY. ISY is not part of a scene. ISY programs the switches, but once programmed, it does not participate in scenes (although the PLM does). This is not to be confused with programs in the ISY which work independent of the Insteon protocol.
It sounds like you have power line noise interference. You can run a scene test on the isy and see what it has to say. You can also check the links recrods on all the devices in the scene and compare them to ISY's record of what should be there. Some transformers and lots of CFL bulbs cause noise. Look for obvious stuff, unplug it and retest. If that doesn't fix it, try turning off all the circuit breakers in the house except the ones with the devices in the scenes/plm. Redo the scene test. If all is good, start turning on breakers 4 at a time until the problem resurfaces, then narrow it down to which one of the 4 is the problem. Then filter whatever it is on that breaker or just filter the entire circuit if it doesn't contain any Insteon devices.