Update 2: Drobo is fine now after the rebuild. Just a poor contact or something and reseating the drives fixed it.
As for the error, Don't panic.
I added a 3TB drive I surface scanned twice, had only about as many power on hours as my SSD, and the SMART data all checked out. It is an Hitachi Enterprise grade drive I got JUST out of warranty but it was super clean too.
Betting it was sold off because the warranty ended. I got it with a 1 yr Squaretrade warranty for about 40 bucks and it's going into my storj node.
I digress.
I cleaned it a little with uncompressed air before all this.
I pulled the smallest drive and got the above lights twice on power up.
Powered it down a third time and after that re-seated all the drives.
Worked fine and it's rebuilding now...9 hrs to go but I think that's a bit on the high side as it was only originally a 1TB drive.
Of note: sometimes the Drobo ejects off my MAc but I think the power supply may be getting old, or it's the aftermarket USB3 card in my Mac.
Disk First Aid always checks out, so, I guess it's fine.
And yes I'm planning a Cloud/image backup here shortly. :)