The guys at the Charleston Model Railroad Club asked for a simulated flash of an arc welder. A $4 (was $2.50, price went up since we purchased) arduino nano clone, a 130 ohm resistor, and a white LED later, they have their arc welder. This is a fun and inexpensive project that adds to the realism of your layout!
Project inspired by the work at http://mrrwa.org/wp-content/uploads/2011/07/ModelRailroadingWithArduino.pdf
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Just connect a wire from pin 9 to the resistor, from the resistor to the long leg (+) of your LED, and the short leg to Ground.