That's a very confusing description of something, I'm not sure what.
Is there an Arduino involved in this anywhere? What sort is it? Does it have a program loaded? If so please post the program.
What exactly is your "hacked" cable supposed to do? I can't see a MIDI-USB adaptor with no connections on the MIDI side being of any use to anyone. But if it's the sort of MIDI-USB adaptor I know then one LED tells you it has power and the other two only light when a MIDI signal is going IN or OUT.
What does Blink have to do with it? The Blink I know doesn't do anything with MIDI. And what makes you think there is "a communication error somewhere"?
Steve