Blinking light at the switch means the adaptive function is not working.
Can you actually see the headlight aim/moving right? Then when you center the steering wheel it stays pointed to the right?
If so, then I believe its probably not a bad stepper motor inside the headlight. I'm not sure if the stepper motor controls vertical movement but I know it controls horizontal movement.
Maybe your projector is loose and is not mounted all the way?
http://www.xoutpost.com/bmw-sav-forums/x5-e53-forum/32782-xenon-headlight-problem.html
There are also headlight aiming adjusting knobs for vertical & horizontal adjustment. Maybe the horizontal is just adjusted out of range?