I had a similar issue when I first installed my Rachio 3 8 zone controller a few months ago. The 3rd section would blink red 7 times (If I recall correctly), and then fall back to the 2nd section blinking yellow. I retried several times with the same result. I eventually decided to have the Rachio connect to my Hotspot on my phone, and let it run like that for about 2 hours to let it do any updates, and then I used the “Update Wifi Network” under “Controller Settings” to switch back to my Wifi Router… and even though it started to error out again, I decided to step away and get lunch (I figured if I stepped away and came back to it, I might think of something else to try). However, when I came back it was connected, and it has not had any problems since. The Router has reset a few times due to firmware upgrades since the initial install, so I know it is reconnecting without any problems now.
My thought is the controller just needed to do a firmware update that had code to handle dual band (5GHz/2.4GHz) radios, because my router does both, and I have seen other IoT device have issues finding the network when both frequencies are using the same SSID.
I know that does not solve the mystery, but hopefully it will get you up-and-running. Maybe someone else has better insight, but I wanted to share my experience.