I"ve got a similar problem, it's new years day today, my TV was working fine last night, I wake up this morning and no picture. Sound works fine. I don't get a flashing red light, it's steady just as always, and steady blue when I turn it off.
But the LCD isn't lighting up (there's no glow) so I can't even see the menu. I called Insignia support and they tried all the obvious idiot-stuff, told me to leave it off for 1/2 hour, but still now worky-work. I'm leaving it off now for a couple hours, but know that wont do any good. Guess I'll have to take it into Best Buy.
I love this TV, it's the 32" widescreen, LCD, with HD picture it's fantastic, although I agree the blacks aren't super black. The Matrix doesn't look quite as good as say LA Confidential. These are really just Mitsubishi TVs with some other cheaper parts added in and the Insignia label. I found that out trying to get the universal remote code for my Dish remote, it's a Mitsubishi code.
Mine is almost 3 years old, I didn't buy the warranty, which I'm still not upset about, still think they are a rip, but it's too bad it died so soon. My family had a mitsubishi that lasted like 15 years, and we sold it so it may still be out there at 20 yrs working fine. What a way to start 2009! I should be reading more anyway.....