Are you currently running Linux on the system, and if so, how is the system set up drive wise. Are both OSes on the same drive, or different. Was the other drive installed while you were installing Windows 7.
The Blinking cursor normally means the boot system could not be found. I have seen situations where the install media had to be present to boot, but have not been able to recreate.
Depending on your answer from the first question, the best thing to do would be to boot into the Windows Recovery environment and do a Startup Repair. Once the repair has opened, remove the pen drive so it will not be involved, just in case.
If you want to continue to use GRUB, that is out of my area, but you would probably have to check the differences between the default and alternative and set the default like the alternative.