Looking at the blinking LED was easy, but converting that back into morse code was more difficult than I expected. I will not share how I did it here, just in case you want to try the challenge yourself. However, my code is attached to this post if you're interested in seeing how I solved the problem.
http://www.youtube.com/watch?v=V2ZPYs7jHKs
Part 1: Staring at the LED
http://www.youtube.com/watch?v=9RuwKBmQxvg
Part 2:Interpreting the blinks
Thanks to N2MOH for the morse sender (I also copied your timing constants) and Scott Hanselman for the morse array.