Hello Guys I have probably spent 10 hours on this and I finally made it work.
For those still looking solution for using Arduino UNO with ESP8266 shield and Blynk here it is.
Following those instructions.
For PC users use only steps 1,2,7,8,9,10.
The problem happens after updating the ESP's firmware, because by default the baudrate is set to 115200.
To fix that.
1. Connect ESP to Uno using pins D0,D1 and upload bareminimum to UNO board.
2. Open the monitor at 115200 and type AT and press enter. It should respond OK. (if not then reverse the RX TX cables)
3. That means your ESP board is in working condition and you have comunication.
4. Then type AT+UART_DEF=9600,8,1,0,0 and that should change the baudrate to 9600.
Now connect the esp again on pins 2,3 and upload the ESP8266_Shield sketch with your auth pass ssid and password updated in the code.
Open the monitor select 9600 and you should see this.
If not then reverse the RX,TX pins.
For more help reply here.