Yellow monitoring light keeps flashing after RAM upgrade

I bought an used Xserve late 2006 and upgraded the CPU from 2.0 Intel Xeon to 3.0 Xeon without any problems. Then I swapped the memory to 16GB (8x2GB) also without any issues.

Finally I upgraded the memory again to 32 GB (8x4GB) and now I have several issues. The yellow light in front keeps flashing but the server boots and shows me the correct size of memory. If I install only 16 GB (4x4GB) there is no yellow light but the server restarts sometimes before I turn it on.

I always installed the RAM correctly in pairs. Also I use server memory from Hynax, which is also used by Apple in their Mac Pros.

I think it is not a memory issue because the server behaves normally except the yellow light in front which rapidly flashes with 32 GB installed. I can also see the full size of memory in the system profiler.

Has anyone an idea what could be wrong with the system?

Thank you!

Before I forget. I do not have the Apple hardware test for the Xserve late 2006. There is Snow Leopard 10.6.8 (NOT Snow Leopard Server) on the Xserve.