I boxed up the display and took it to the mall. Sitting it on the Genius Bar, we weren't able to recreate the problem immediately with the Store's Air, so they took it into the back for observation. The next day calling to tell me that the panel had failed which would be an $833 repair, as this would be on a display that I could probably find for $900 if I searched online, and I would end up with a used Thunderbolt Display, I told them to scrap it and set about rearranging my home monitor situation. I have a Viewsonic monitor with an even nicer panel than the Thunderbolt that I could repurpose as my primary monitor, although I was not happy about losing the Thunderbolt's docking capability.
And here comes the strange part. A couple days later, the Apple Store calls back to tell me that since they had the parts anyway, they had decided to try switching out the motherboard instead of the panel, and the resulting display was no longer showing the failure even after 6 hours of testing. So I could have my monitor back for $185. I jumped at that. I had been missing it.
At the store, the Genius who took me my display told me the odd story that the original diagnosis of a bad panel was just the worst case scenario, and they hadn't been sure at the time. Which is definitely not what they had told me when I'd told them to scrap it. I had thought the symptoms I was seeing were pretty strange for a bad panel, and I'd argued at the time with the woman on the phone that it might be a bad power supply, and at the time she was adamant that it was the panel. So I had accepted the Store's diagnosis.
So, I have my monitor back. Time will tell if the repair worked. I'm glad the Apple Store repair people didn't scrap it, and had taken the time to try something even after I had given up hope, but I have to wonder why they gave me such a bum diagnosis in the first place.
[Update: well I've had it on my desk for a few hours and it's starting to go directly to a blank screen every few minutes, which is different than what I had been experiencing before where it was mainly large black rectangles followed by sometimes going blank . Plugging and unplugging brings it back. So maybe it wasn't the motherboard, or maybe this motherboard is going bad too. Hooking up a spare Thunderbolt cable to the Thunderbolt port on the display allows me to drive the monitor 'backwards', and I have not seen any blanking in a couple hours, so my current diagnosis is that the integrated cable is bad.]
[Update: well I've had it on my desk for a few hours and it's starting to go directly to a blank screen every few minutes, which is different than what I had been experiencing before where it was mainly large black rectangles followed by sometimes going blank . Plugging and unplugging brings it back. So maybe it wasn't the motherboard, or maybe this motherboard is going bad too. Hooking up a spare Thunderbolt cable to the Thunderbolt port on the display allows me to drive the monitor 'backwards', and I have not seen any blanking in a couple hours, so my current diagnosis is that the integrated cable is bad.]
[Update: After several days of driving the monitor 'backwards', I have seen zero problems. So I'll be heading back to the Apple Store to ask them to replace the Thunderbolt cable and give them a suggestion about testing before telling someone their $900 monitor is scrap worthy.]