Your battery seems fine. If cells were dead, the voltage should be lower. I don't know why the alarm would go on though, and it shouldn't have anything to do with the battery as I know it doesn't go off when the battery is disconnected or re-connected. For the flashing lights, the only thing I can think of would be the cabling. Perhaps consider a ground kit, or clean the heads on the battery and the connectors. Sometimes dirt or rust/sulfur can build up there and create a unstable connection.