Things like this have happened before, and it usually has to do with having water or gunk on the lens, and shooting in a brightly-lit area. Creates this eerie bloom-lighting effect.
I think what happened here is that we'd hiked up and back down the trail that went through the bamboo forest and led to the 400-foot waterfall (probably about 4 miles total), and by the time we hiked to this short little spot, all the water and sweat from the hike had made its way onto the camera. Plus, being a cheap plastic contraption, the flash button got permanently stuck and washed everything out. Still, what a beautiful, happy accident.
Anyway, I love it, and I'll probably have to add it to more things (either digitally or just buying another $10 camera).
Oh, btw, the miniature effect you see with dioramas is called "Tilt-Shift," and the proper way involves having two lenses in a camera, with one tilted and shifted away from the other to manipulate the depth of field. It's actually pretty easy to simulate in GIMP or Photoshop: www.photoshopessentials.com/ph…
Ah. Well, just wanted to make sure. It'd be a shame if you ever missed out on something as cool as tilt-shift. My girlfriend has a point-and-shoot camera (a Canon Powershot) that actually has a tilt-shift filter as an option. Fun stuff.
The Van Gogh one's my favorite, too. I'm incorporating it into a really dark satire/graphic novel thingy that I work on every so often. Probably won't ever release it, but who knows. It's fun to work on, anyway.
Camera's do break surprisingly easily, but I actually had a different reason for using a disposable. The Road to Hana on the way to the Park was so pretty that I burned through most of my camera battery, and I didn't have my charger that day. Bought a cheap disposable at a gas station just in case my battery died completely. It didn't, but I used the disposable anyway. Really glad I did.