I needed to build a half dozen lighthouses. The lantern (the part where the revolving light and Fresnel lens is located) is the tricky part. All the lights had to work and look realistic.
I found a custom circuit that would allow an LED to pulse on and pulse off with a 3 second gap between the pulses. The circuit operated on between 9 and 20 V AC or DC - perfect for the auxiliary side of many train power supplies.
To hide the bright LED I used a piece of clear plastic rod. I drilled out a hole for the LED to fit in, and roughed-up the outer surface with fine sandpaper to diffuse the light. It works and looks nice.
BTW - I'm holding the top of the lighthouse with a paper cup - the wires can hang down through a hole punched in the top of the cup.