Possibly Poorly Built Fuze?

There have been slightly discolored spots in the screen of my Fuze ever since I got it.  About three to be precise.

Last night, when I was setting my alarm with the alarm clock plugin with Rockbox and a red, sort of pulsating dot appeared in the center of one.  it wasn’t pulsating evenly, and I could twist the body of it and it eventually disappeared.

So my question is, does anyone know what the discolorations and the red dot is?