I decided to zoom in on a lamp in the house the other day, and adjust the iris so you could see the bulb clearly (no peaking). Not only did the image go completely out of focus with the Iris *just* open, but I noticed a mark, shaped like a drop of water, jiggling around inside the lens. It seemed independent of the light coming in and was only visible with the iris barely open, zoomed in on the light bulb.

This is probably something to do with image stabilisation, I am just interested to know what it could be?

It kind of gets to me when I see something that could be 'off' with my camera. Eek.

It would go out of focus because of diffraction I would guess, given such a tiny opening on a small chip camera the laws of physics would only allow for a tiny bit of lens resolution.
The "drop" could well be one of the moving elements in the lens if you had the IS on, don't forget you'll have so much depth of field at that aperture on that chip that'll be seeing inside the lens barrel!!!
My advice - don't do it! You won't in a real situation so I wouldn't worry about it, try to keep the aperture between f4-f5.6 for optimum sharpness.
Steve

Ah yes, no I would never try and shoot something at that low aperture - I mean what are ND filters for? Thanks for the explanation though!