I'd go with the LED. I wouldn't use the micro-Mark kit though, because it'd probably be cheaper to DIY one. At the very least, there are much better LEDs (both smaller and brighter) out there now than the ones pictured in the kit.
My electro-fu is very weak, but I'll bet that board could be simplified, and thus miniaturized a lot further too. Swapping the screw connectors for soldered leads definitely, but I'll bet you could get a random-looking flicker or blink pattern by (oversimplification warning) using a few different valued caps in parallel so their discharges stagger and overlap.