You state:

Update: After switching to the cables provided with the PSU I am now able to boot. Who knows why?

It sounds like you had a modular power supply, and you new power supply is also modular. Did you leave the cables from the older power supply in place?

Modular cables are not interchangeable! Most use the same 6 pin connectors to connect to the PSU, but have completely arbitrary pinouts which vary depending on the vendor.

Take a close look at the old cables and the new cables. I'll bet the wires coming out of the ends are in a different arrangement. The fact that you lost 2 hard drives makes me even more sure that this is a reverse polarity issue, not dust shorts.

The P6X58D-E uses an AMI bios, here are the beep codes.

1 short DRAM refresh failure  
2 short Parity circuit failure  
3 short Base 64K RAM failure  
4 short System timer failure  
5 short Process failure  
6 short Keyboard controller Gate A20 error  
7 short Virtual mode exception error  
8 short Display memory Read/Write test failure  
9 short ROM BIOS checksum failure  
10 short    CMOS shutdown Read/Write error  
11 short    Cache Memory error  
1 long, 3 short Conventional/Extended memory failure  
1 long, 8 short Display/Retrace test failed  

Update

Asus motherboards have a built in memory tester called DMEM OK. They have posted a video to their youtube page which demonstrates how to use the memory tester. https://www.youtube.com/watch?v=9azllBzU5PU

In the video you will notice that the machine is not booting. They press the DMEM OK button and the DRAM_LED starts flashing. The flashing means that the motherboard is testing the ram. The blinking is not intended to be user readable.

The Manual for your motherboard states:

MemOK!
Memory compatibility is among the top concerns during computer upgrades. Worry no more. MemOK! is the fastest memory booting solution today. This remarkable memory rescue tool requires nothing but a push of a buttton to patch memory issues and get your system up and running in no time. The technology is able to determine failsafe settings that can dramatically improve your system booting success. Refer to page 2-24 for details.

It is most assuredly testing different latencies of the ram until it finds one that works, the led is simply there to let you know it is testing. The manual states:

During the tuning process, the system loads and tests failsafe memory settings. It takes about 30 seconds for the system to test one set of failsafe settings. If the test fails, the system reboots and test the next set of failsafe settings. The blinking speed of the DRAM_LED increases, indicating different test processes.

Motherboard manufactures test with many different vendors of Ram. (You can see the tested ram on page 2-12 of the P6X5D-E manual)

Most of the time, the motherboard can detect the proper latencies to configure the ram. One ASUS motherboard my company sold years ago, was not compatible with the Muskin ram we were selling at the time. Every new machine that was built, had to have the CAS latency manually set in the bios, otherwise every system would blue screen shortly after boot.

The manual further states the following pieces of information:

Installing DIMMs that are incompaible with the motherboard may cause system boot failure, and the DRAM_LED near the MemOK! switch lights continuously. Press and hold the MemOK! switch until the DRAM_LED starts blinking to begin automatic memory compatibility tuning for successful boot. (Page 2-24)

The DRAM_LED also lights when the DIMM is not properly installed. Turn off the system and reinstall the DIMM before using the MemOK! function.

So the answer to your question, the DRAM_LED is blinking because the motherboard is testing the ram. The leds blink faster the further through the test the motherboard is. There are no user interpretable blink codes

Resources
http://www.pchell.com/hardware/beepcodes.shtml
http://www.techspot.com/community/topics/asus-k8v-se-deluxe-i-get-one-long-continuous-beep-when-i-power-on.40764/