ECU error code

I checked my ECU today and when i turned the car on the red light flashed 1 time. Apparently this is indicating a problem with the oxygen sensor. if 0 flashes is a problem with the ECU and 1 flash is the oxygen sensor then what does the ECU do if you dont have any problems. Could a bad oxygen sensor be linked to my problem of not being able to shift into 3rd gear?

If there are no problems the ECU light will not flash at all. The O2 sensor has nothing to do with the tranny. Your problem with not being able to shift into 3rd is probibly a wasted syncro or a syncro snap ring that has come slightly ajar from the syncro.
The syncro ring is what holds your car in gear. it is a small melal ring that goes around the syncro.