RSSI seems good since
But it isn't. RSSI is not a good measure of distance. Far more things have a greater impact on RSSI than distance.
I just want to end up with a blinking LED with its blinking frequency proportional to strength of the signal coming from the transmitter.
Why? What transmitter?
I'm open for anything that meets the following criteria:
small transmitter
cheap modules
works up to 100 m outdoors
preferably power-efficient
Nothing meets all those criteria.