Originally posted by GunsForBucks:

Things that flash red are broken. You need to interact with the crafting station it was crafted at and look for the hammer icon next to the build list. Click on that until it goes off and all your stuff is repaired. It will let you equip it when fixed.

Also those black forest guys will spawn in the meadows at night. That is fairly normal if you run around after dark.

Yup. Just chop some wood or use the mining pick and watch yourself get swarmed.