I fly P3S, use Litchi exclusively, and have not updated the latest firmware. Recently I updated Litchi from 3.10.10 to 4.1.1, and then I was unable to start the drone in a location where before I had flown perfectly fine. Litchi does not display any warnings, and the drone's LEDs are flashing: 2 long REDs followed by 3 short GREENs. The drone starts and flies perfectly fine when I operate it in a different locaton.

The area where I am unable to take off is close to an airport, but still outside of NFZ circle as shown on www.dji.com/flysafe/no-fly.

What does the flashing pattern (2 long REDs, and 3 short GREENs) exactly mean?

I would recommend you to contact our Flysafe Team via flysafe@dji.com for further assistance.

Read the manual there you will see what it means

The explanation in the manual is inadequate. This is exactly why I am posting the question on the forum.

The manual says that flashing red with other colors means "IMU error," i.e. some error with the drone's Inertia Measurement Unit. The drone is not moving. There is no interference in that location that could possibly effect the IMU. The drone was flying perfectly fine in that location before.

What I did notice, however, is that  NFZ circles shown on www.dji.com/flysafe/no-fly are different for P3S and other drones. E.g., if I choose Spark (which is by some reason is "default") then I get Restricted, Authorization and Warning circles. But if I choose "Phantom 3 Standard," I see only "Restricted" circle which is the same as for Spark. So, I am outside Restricted zone, but I am inside Authorization zone. It appears it is for this reason the drone does not take off, and I believe this is what the flashing pattern (two long REDs and three short GREENs) means. The manual says nothing about LEDs when you are in NFZ zones.

Based on the fact that I was able to fly in the area where I no longer can even take off, I infer that during the last 2-3 weeks, DJI quietly updated NFZ making them wider at least for some drones such as P3S, but this is still not reflected in www.dji.com/flysafe/no-fly.

How does the drone know about NFZ? Is this information stored in the app, including Litchi? Is this information updated each time when the app is connect to the internet? Is this information transferred to the drone each time when I fly it, or Is it transferred only when I do firmware update?

I believe its transferred during the firmware update. However, if you haven't done one since your previous successful. flights in that area, then...... They do update the NFZ's over time.