Exactly the same way my project S500 was..
Try replacing the Crankshaft position sensor. (Easy to reach from under the car, located ontop of transmission bell housing..) The crankshaft sensor wire plugs into the top left port on the ignition module.. Check the wire also for any damage..
But I doubt its the crankshaft wire since the red and green lights flash alternately..
Its your ECU module located in the coffin box. (Opposite side of engine bay from the fusebox.)
Open up the coffinbox, and check the 4 red fuses in the module that is located towards the back of the coffin box. My bet is that one of those fuses have blown. Check all four fuses by pullling them out and examine carefully.. Test with a voltmeter if you have one..
Also check that all other fuses in fusebox are ok..
If you car still cranks and does not start, come back here and I'll let you know where to look next!
(Otherwise read my build thread: "The Adventure Begins, Restoring 1995 S500 (ALL PICS)") its long, but its very detailed on how I resolved the issue..