Nice video. perfect example... yes I did the same thing, attached a light to the player, and in my halls it looked amazing, until I left the object behind, the same exact thing happened, the light stuck. Since Im not a programmer I have no idea how to fix this... this is a prime example why I posted the shader, Maybe the other shader folks or Matt have some ideas how to fix it.
BTW the normal map looks fine...
I'm still screwed with my meshes, If I chop off the front half of my character it works great, but If I use a full character (from max) it looks reflection mapped with the shader poking through.. I beleive its a normals problem, anyone know of a way to fix/unify normals besides using max's edit mesh or normal modifiers? they screw my models up worse...
Update-
Got it...Had to weld verts and unify normals
Also , seems like the effect is stronger based on scale of my objects in MED...