Hi straightfeed,
The drill you remember certainly sounds in line with my memory from 1975-77, on the -320Cs.
But on most of our aeroplanes (BCAL), the ones with the blue light, it was on only when the LP valve was in transit. The modified light, if memory serves, was white. It was bright when valve in transit; dim when valve closed. Maybe yours were different.
It certainly would be interesting to know the exact mod state of the fuel panel on G-ARWE, but my present dial-up connection discourages me from trying to find the original AIB report.
Chris