The ADC for this oscilloscope is cracked and malfunctioning – only the upper 4 bits work.  The screws shown that hold the heatsink on the reverse side of the board were loose and probably caused it to overheat and eventually crack.  Credit: http://www.flickr.com/photos/imager/ / CC BY-NC 2.0

That purple flash is a high-voltage arc between the terminals on the oscilloscope.  The silver in the silver-bearing solder migrates over time due to the high-voltage, and once it has migrated far enough, it forms a conductive bridge.  Credit: http://reboots.g-cipher.net