Sadly, I am back to the same problem I started out with again. This time rebooting the computer is not bringing back the red LED. It never comes on and pressing the button only stops the blink program from running. Here are the results logged by the small Teensy loader program that runs in the background:
16:55:00.249 (post_compile 1): Begin, version=1.48, high-res time
16:55:06.318 (loader): Teensy Loader 1.48, begin program
16:55:06.489 (loader): Listening for remote control on port 3149
16:55:06.489 (loader): initialized, showing main window
16:55:06.536 (loader): remote connection 988 opened
16:55:06.536 (loader): remote cmd from 988: "comment: Teensyduino 1.48 - WINDOWS (teensy_post_compile)"
16:55:06.536 (loader): remote cmd from 988: "status"
16:55:06.542 (post_compile 1): Sending command: comment: Teensyduino 1.48 - WINDOWS (teensy_post_compile)
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:045E pid:0000 ver:0000
16:55:06.552 (loader): HID/win32: vid:045E pid:0000 ver:0000
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.552 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:0000 pid:0000 ver:0000
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): HID/win32: vid:8087 pid:0A1E ver:0200
16:55:06.568 (loader): remote cmd from 988: "dir:C:\Users\DW\AppData\Local\Temp\arduino_build_929689\"
16:55:06.568 (loader): remote cmd from 988: "file
ulse_speed_test.ino.hex"
16:55:06.577 (post_compile 1): Status: 0, 0, 0, 0, 0, 0, C:\Users\DW\AppData\Local\Temp\arduino_build_429372\, Pulse_speed_test.ino.hex
16:55:06.577 (post_compile 1): Sending command: dir:C:\Users\DW\AppData\Local\Temp\arduino_build_929689\
16:55:06.578 (post_compile 1): Sending command: file
ulse_speed_test.ino.hex
16:55:06.583 (loader): File "Pulse_speed_test.ino.hex". 12564 bytes, 1% used
16:55:06.599 (loader): remote cmd from 988: "status"
16:55:06.599 (loader): remote cmd from 988: "auto
n"
16:55:06.611 (post_compile 1): Status: 1, 0, 0, 0, 0, 0, C:\Users\DW\AppData\Local\Temp\arduino_build_929689\, Pulse_speed_test.ino.hex
16:55:06.611 (post_compile 1): Sending command: auto
n
16:55:06.613 (post_compile 1): Disconnect
16:55:06.630 (loader): remote connection 988 closed
16:55:06.929 (post_compile 2): Begin, version=1.48, high-res time
16:55:06.932 (loader): remote connection 1044 opened
16:55:06.932 (loader): remote cmd from 1044: "comment: Teensyduino 1.48 - WINDOWS (teensy_post_compile)"
16:55:06.932 (loader): remote cmd from 1044: "status"
16:55:06.932 (loader): remote cmd from 1044: "dir:C:\Users\DW\AppData\Local\Temp\arduino_build_929689\"
16:55:06.932 (loader): remote cmd from 1044: "file
ulse_speed_test.ino.hex"
16:55:06.936 (post_compile 2): Sending command: comment: Teensyduino 1.48 - WINDOWS (teensy_post_compile)
16:55:06.943 (post_compile 2): Status: 1, 1, 0, 0, 0, 0, C:\Users\DW\AppData\Local\Temp\arduino_build_929689\, Pulse_speed_test.ino.hex
16:55:06.943 (post_compile 2): Sending command: dir:C:\Users\DW\AppData\Local\Temp\arduino_build_929689\
16:55:06.944 (post_compile 2): Sending command: file
ulse_speed_test.ino.hex
16:55:06.947 (loader): File "Pulse_speed_test.ino.hex". 12564 bytes, 1% used
16:55:06.963 (loader): remote cmd from 1044: "status"
16:55:06.972 (post_compile 2): Status: 1, 1, 0, 0, 0, 0, C:\Users\DW\AppData\Local\Temp\arduino_build_929689\, Pulse_speed_test.ino.hex
16:55:06.972 (post_compile 2): Disconnect
16:55:06.994 (loader): remote connection 1044 closed
16:55:06.994 (loader): remote connection 1040 opened
16:55:06.995 (post_compile 3): Running teensy_reboot: "C:\Program Files (x86)\Arduino\hardware\teensy\..\tools\teensy_reboot.exe" teensy_reboot.exe "-board=TEENSY40" "-port=usb:0/140000/0/4" "-portlabel=(null)" "-portprotocol=(null)"
16:55:07.270 (reboot 4): Begin, version=1.48, high-res time
16:55:07.270 (reboot 4): location = usb:0/140000/0/4
16:55:07.270 (reboot 4): portlabel = (null)
16:55:07.270 (reboot 4): portprotocol = (null)
16:55:07.270 (reboot 4): LoadLibrary cfgmgr32 ok
16:55:07.270 (reboot 4): LoadLibrary ntdll ok
16:55:07.275 (reboot 4): nothing new, skipping HID & Ports enum
16:55:07.276 (loader): remote connection 1044 opened
16:55:07.282 (reboot 4): Disconnect
16:55:07.307 (loader): remote connection 1044 closed
16:55:07.307 (loader): remote connection 1040 closed
16:55:16.917 (loader): Verbose Info event