There are two things to think about in this project: Hardware and Software.

The hardware is simple in this case: One RGB-LED or three individual LEDs in three different colors are connected to resistors and a microcontroller (ATTiny?) on analog output.

The important thing on software-side is representing the time on the LED in a format humans can read with easy explanations. Following are my first notices about this.

- There are 12 different hours to display. Assign each one a color. As each LED can be controlled in brightness, it should be easy to find 12 distinguishable colors.
- There are 60 minutes in a hour. Every LED can blink in 4 different patterns, which means 4*4*4=64 different blink combinations. One LED counts quarter hours, and the other two represent a number of minutes in that quarter.