(snip)
I do have a residual question if anyone has the time to answer it for me. Why—if I had placed the probe ground on the anode—would I have potentially blown the LED? Wouldn't it just short the current so that it never reached the LED? Does this scenario rely on main earth bonding or not? I would like to understand the various way I could have screwed up so I get the benefit of multiple mistakes for the price of one!
Well, let's see. If your laptop is isolated from the mains ground, then the Arduino's ground, while it is connected to the USB ground and hence to the laptop's case/motherboard/psu ground, doesn't make a complete current path back through the mains to the scope's ground clips. So simply touching the scope probe ground to the Anode would not have done anything. But while you were probing around, if you inadvertently shorted the Pin 2 of the "102" resistor array over to the Pin 1/LED Anode, the LED would have immediately turned redorange and then fried, since the Arduino's 5V bus is connected directly to the Pins 2 and 3 of the resistor array. This shorting is very easy to do since those pins are so close together; even a pointed pin probe might do it. It is essentially connecting the LED directly to a +5V voltage regulated source without a current-limiting resistor, and the other side of the LED is connected to the ground return of the 5V source.
I'm still not 100 percent convinced this is what happened but it seems very plausible, according to your description. I'm still not understanding where the "sparks" are coming from though. Once the LED is blown and presumably open rather than shorted, repeating the Pin2 to Pin1 short should not have done anything, no sparks.
ETA: Did you perhaps have another scope probe ground connected somewhere else? All the probe ground clips are connected together at the scope chassis BNC connectors, and also to the Mains ground pin.