Thanks for the replies. I have played with it a bit more and have got a better result. The next step is to introduce bulges to the gradient map as you have cleverly suggested!
Regarding the 24hr playback – this has not been thoroughly thought through. I have assumed using the right codec/compression-mode will allow for this. I presume you think that the file will be so large that it will not be playable?
The screen will comprise of 60 or so frameless LED screens clamped together. A separate company that specialises in this will do that. All the screens will then be hooked up to a central computer where we can display any video.
Here are my current tests. I added clouds to help with seeing some distortion through the rods.
In this image the rods (ie the gradient map) is not displaced, but an ice normal map texture is – as per Andrew Kramer’s glass tutorial.

In this image the gradient map is displaced. Not a big difference, but still a nice effect.

Please let me know your thoughts.