I read this again, and something doesn't make sense.
You said that if 1 call is in progress, all 4 line keys light up? Are you sure that the keymap is correct, and Line 1 isn't programmed 4 times?
If the CO trunk group ring-in destination is a hunt group, anyone with answer access can answer a ringing call. The line key will be blinking, not lit steady.
Calls answered by an auto attendant and transferred to a hunt group will cause the line keys to light steady. But if the call hasn't yet been answered, everyone blinks.