The behaviour you describe with "the blue ring" sounds like a hardware fault specific to your device, I'm afraid. This is not intended function.
If I parse your initial post correctly, this was an issue for you with the original firmware as well, which indeed points to it being a hardware fault. Rockbox and the original firmware are entirely separate, if a bug affects both firmwares, it is almost certainly a hardware fault (or two entirely separate teams of developers managed to make exactly the same mistake, a mistake which apparently only affects your device...rather phenomenal odds against that one).
[Saint]