If I remove one of the four drives, will Drobo move the data around and eventually go back to green lights for the remaining three drives, or will it continue to flash forever until the forth drive is replaced?
If there is enough space on the remaining three drives then I think Drobo will relay the information out over the three remaining drives but will continue to flash if there is not enough free space to protect the files if one of the remaining three drives should fail.
In theory, yes but in my experience w/ my Drobo units, no! Still trying to understand how BeyondRAID works and I should spend some quality time in my lab. Starting w/ 2 drives, 3 drives then 4 drives w/ varying capacity. Interesting, I also tried 2.5" 7200RPM Seagate Barracuda drives and Drobo recognized them. We are having a lot of funs w/ drobo & droboPro. 
go to the website and use the drobulator to see how the deive sizes work. If there is enough space left on the three drives to allow for another drive to fail and keep you data protect on the remaining two drives then the 4th bay light shouldn’t flash, to my knowledge but if there isn’t enough space then it will flash asking for you to add another drive. It can take some time to relay out the information across the remaining drives though.
If there isn’t enough space I can see the problem, but I’m wondering with the belief there is enough space available on the remaining three drives.
If there is not enough free space on the remaining disks then drobo can’t rebuild to a safe state. You will not lose data, but drobo will not survive another disk crash.
Just add enough HDD space and drobo will return to a safe state.
If you have enough space, the drobo will rebuild your data on the 3 drives and the remaining 3 drives will be green after the rebuild.
Thank you very much.