The most obvious cause of blinking yellow light on Airport Time capsule is the hard drive error. It maybe because the cable from the Airport device and modem is unplugged. Here’s how to resolve time capsule flashing yellow. First, switch off the modem and the Airport time capsule. Hold on the reset button and connect the power adapter to the electric source. Once the modem restart, change the settings and save them. Switch on both the devices, the issue must have resolved.