Hi,
I can't provide a quick, solved answer, sorry. I think, unless other members are familiar with the devices you are using, one method of understanding the reasons is to - a "boring", time-consuming task but good for learning at least - is to read the LPC2148 datasheet/manual, etc and compare it to the "blue board" and "olimex", it means doing a bit of detective work and comparing and contrasting...
I read a Broadcom chip datasheet/manual to compare it to a device I have and the pins I can use on it, and it was very enlightening indeed to see how the device manufacturer uses some of the Broadcom features, and brings out other spare/left-over ones for users like myself to play with, but some features are shared/crossed-over and you/I would have to disable something else to use them. I'm guessing that's one possible reason why the wrong LED was blinking.