Although I can't speak for the surge issue, there should be no problems at all with flashing an LED. Flashing IS generally bad for HID bulbs, especially if the ballast doesn't support hot-restrike.
I'm leaning towards the "Cheaply Made" thing, myself, although I will give some credit to the heat issue, too, though I also find it surprising that they would heat up so much while in place like that.





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