I have had a few questions about how this circuit works so here is a wiring diagram and a short explanation of how it all works.

Question 1: How does this circuit work without a ground?

    Basically the negative side of the LED is grounded, but only when the car is turned off. Normally you want certain things in your car to turn on only when the car is running (i.e. the stereo, windshield wipers, etc.), therefore certain circuits are only energized when the key is turned to the acc. or on position. However what we want here is the opposite effect, we want a circuit that is only energized when the key is turned off (because we want the LED to flash when the car isn't running, not when the car is running). Unfortunately there isn't such a circuit already built into cars because there is nothing in a car that only gets power when the car is turned off. I could have run the positive side of the LED to a constant power source and the negative side of the LED to a normal ground but then the LED would flash all of the time, even when the car is running. By attaching the positive lead to a constant 12 volt source and the negative side to a switched power source the circuit is only grounded when the car is not running. This works because when the car is running both sides of the LED are seeing 12 volts and therefore there is no ground or voltage differential, but when the car is turned off the switched power source goes to zero volts (or ground) allowing current to flow.

Question 2: Why do you recommend a 5volt LED, shouldn’t I use at least a 12volt LED?

    This takes some basic electronics knowledge to understand. Basically the circuit starts off with 12 volts, an LED only drops about 1.5volts across it so that means there is still about 5.5 volts that need to be dropped in order to bring the circuit down to 5 volts (the voltage the LED requires). This voltage drop is the function of the resistor and this is the reason that varying the resistance of the resistor causes the LED to blink at different speeds. If you want to verify this just place a multimeter across the resistor and you will see approx. a 5.5 volt voltage difference across the resistor.  

Fake Alarm LED