I will use this thread as an open progress thread for my contest entry.
I have a clear picture of what I want to do. But I will try to slowly sidestep my way forward and see if I can develop and make my concept better.
My initial concept Idea is to project a blue circle onto a surface. This surface is subjected to bumpmapping and displacement mapping. The texture is re-feed to the surface plane through a second camera, thus creating a feed-loop that will create a fractal pattern.
Diagram:
