First, if you're using DOS-type files, the lines are separated by "\r\n" instead of just "\n". You might have to tackle this as well. Of course, were you on one of those systems, your $/ would be set accordingly. Try this?
$lines =~ s#($/)+#$/#g;
The /m and /s flags seem to be a little extraneous given your specific circumstances. /m is used to modify the behaviour of ^ and $ within the regex, /s to modify how . is processed. See perlre for more details.

As a note, this is virtually identical to some of the replies you received for remove blank lines with regex, so why you posted again is unclear.

In reply to Re: Another Problem Removing Blank Lines by tadman
in thread another problem with the blank line regex by amarceluk

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