You got it, it was in valet mode. There's a toggle switch tucked up high on the wall under the dash that apparently controls that. Once I flipped the switch off the led turned off and I could arm and disarm the alarm. I hope that doesn't mean a thief could just hit that switch and turn off the alarm. I guess I'll have to test that sometime when it won't annoy my neighbors.
Thanks!
Ben

1986 Isuzu Trooper, 2.3l, 119k miles when acquired 3/1996, 231k at time of death 9/21/03.
1995 Jeep Cherokee Sport 2-door 4x4, 4.0l, 5-speed, 85k miles when acquired 11/2003, 138k now.