Do not pass when signals flashing.
I can't find the verb in the when phrase. I assume "flashing" is a gerund form, and the sentence is missing the verb are.
Update: 17 Sep 2015 - The question was edited after I cut and paste the above from it.
You are right about the missing verb. The full sentence would be:
Do not pass when the signals are flashing.
However in that case 'flashing' is not a gerund, it is a present participle.
There is a useful discussion on the difference here. THE -ING FORMS edufind.com