Jason,
Appreciate the feedback. This is actually an Apple-replaced LCD. I managed to get them to replace it out-of-warranty with a polite but firm call to Customer Relations in Cupertino.
The timeline is as follows:
Oct 2010: Purchase 27" iMac
Oct 2011: Dont' purchase Applecare with the logic "Eh, I've never had a problem with an Apple desktop before. What's the worst that could happen?"
Nov 2011: Worst happens. Notice smoke/water stain on right hand side of monitor. Apple replaces it out-of-warranty
Nov 2012: Stain has returned, but comes and goes. iMac goes in for HD recall. Stain disappers for several months, but eventually resurfaces.
I'm wondering if the techs at the Apple Store cleaned the LCD while they had it apart for the HD swap. I'm debating about pulling apart to try to clean the LCD since it's out-of-warranty, but it's definitley not for the faint of heart.
To be honest, the path of least resistance is to get an external monitor and use that as my main one. I'm not wild about this, but yanking apart the iMac is really not something I'm dying to do. I will definitely think twice before making another iMac purchase.
Moral of the story: If your Apple product has a built in screen, ALWAYS get AppleCare.