Hello folks,
After hearing about some local folks having trouble with this board, I bought one to investigate. I wrote about it in length in my Hebrew blog - but maybe the results would be of interest to readers here too.
It turned out that the ATmega328's clock fuses were set to the (factory default?) internal oscillator (which is 8MHz) with a by-8 division; hence the 16-second blink. When I reprogrammed the fuses to the proper values (for the external crystal) the board died, because apparently the crystal itself was defunct, so now the MCU had no clock and no ability to communicate with anything.
I applied an temporary external signal, rather brutally, to the MCU's XTAL1 pin and managed to revive it; I programmed the fuses back to the internal oscillator without the division, so basically I have now a working 8MHz-Pro-Mini clone.
Important note: Trying to burn a bootloader using the Arduino IDE on a board with this specific problem is a bad idea, because apparently the burning process includes resetting of the clock fuses to the external crystal.
To summarize, there are indeed plenty of faulty boards of this kind - some may be saved by burning a new bootloader, essentially by the part where the fuses are set correctly; but if it's also a hardware problem, like I had, this will require some extra effort.
I used Atmel Studio and an AVRISP MKII programmer for this inquiry; The same can be done with other programmers and AVRDude but don't ask me how. Hope it helps!