Guys, does anyone have any experience with working with displacement maps. I
would like to create a believable magnifying glass and the only thing that is
missing is a believable distortion of the image at the borders of the glass. I
have found Grant Skinner did something like this at
http://www.gskinner.com/blog/archives/2005/09/flash_8_bluepri.html but I have
no idea how to work with it. He did not release the code yet... Can it be
loaded as a bitmap or does it have to be generated on the fly? Any ideas or
even direction would be appreciated! Thanks

I am sure it is scripted, not just a simple loaded bitmap. Senocular released his version...You can download a .fla here: