The DSS receiver is located about 1 foot to the right of the base of the TV. The DSS receiver actually goes through a Sony pro-logic amp/tuner for video switching before going into the TV. But the tuner isn't part of the problem - I've bypassed it and still the same problem.
I live a very humid environment, however I must say that for the last few weeks it has been very dry.
What you explain certainly seems to make sense - but I have two questions in that regard: 1) Would the arc theory still apply given the tuner is in between the TV and DSS? 2) Is the suspected arc a one-time (or at least rare) event, or should I be concerned and consider returning the TV to prevent futher damage to my other equipment?
Lastly, I'm still not sure if the blue bleed is a result of the DSS alone, or if the TV's picture is also contributing by being "out of alignment" - maybe it is showing too much of the bottom of the picture and thereby exhibiting the blue bleed on occassion?
This really stinks - it is difficult to be sure of what is really going on and what component is at fault. But I must say, your arc theory makes the most sense so far.