I have seen the flashing effect before the LED fails completely with some 1 watt LEDs bought on ebay. My theory is that it is a bonding problem. I think the bond breaks connection as the LED warms up and re makes when it cools. The process then repeats.

Les.

 

Less than a year old, Walmart outside LED security light.

It might have been on the store shelf for years. It probably uses a cheap old style Ni-Cad battery instead of a modern Ni-MH or Lithium battery.
The solar panel needs at least 8 hours of "solar" very bright light from the sun, not from a light to charge the battery.

 

I’m inclined to think that the circuit board developed a problem, due to the smell, battery seems to be working ok, and LED panel works fine with a wall wart supply hooked to it.