This isn't all that abstract or theoretical of a problem. There's lots of devices (printers without lcd screens, routers, for example) which use one or two lights, possibly with different color options, to display a bunch of different possible errors. Often this simply means creating a "key" for the interface (i.e. check the manual to look up what two blinking red leds means or what one steady green and one blinking red means) which is admittedly not fun for the user, but it's also damn hard to make things intuitive with so little resolution (literally!) to convey your info in.