Following up my post of Sept 27, 2012@15:51 GMT, here is a second issue that has arisen through these discussions.
Issue 2: Lagrangian formulation, holonomy, and non-local physics
In a response to "The Universe Is Not a Computer" by Ken Wharton, I said
"You stated 'As regards the LSU formalism, this non-local approach is very interesting. You state "Instead of initial inputs (say, position and angle), Fermat's principle requires logical inputs that are both initial and final (the positions of X and Y). The initial angle is no longer an input, it's a logical output.' Yes indeed. What this Lagrangian approach does is very interesting: it puts dynamics into a framework that resembles the process of adaptive selection (the dynamics is offered a variety of choices, and selects one that it finds optimal according to some selection criterion, rejecting the others). This kind of process occurs in various contexts in physics, even though this is not widely recognised; for example it underlies both Maxwell's demon and state vector preparation (as discussed here ). I believe there may be a deep link to the dynamics you describe. This may be worth pursuing."
This Langrangian kind of approach leads to selection of paths between the initial and final point, and hence of velocities at the starting point, in contrast to the initial value approach where that initial velocity is given ab initio. This theme has come up again in the presentation posted by Cristinel Stoica [Sept 28 2012 @ 06:27] GMT and is actually implicit in the Feynman path integral approach to quantum theory, as so nicely explained is Feynman's book "QED". What happens in determining the classical limit is selection of the 'best' path, after trying all paths (Feynman and Hibbs: pages 29-31). This determination is obviously non-local, and so is influenced by the topology of the path space, as shown so clearly in the crucial Aharanov-Bohm experiment.
This of course supports the general view that what really underlies physics is parallel transport and holonomy; Yang-Mills theories fit into such a broad picture.
One of the deepest questions underlying physics is "Why variational principles?" If the dynamics is viewed as resulting from such a process of selection of a particular path from the set of all paths, there is a glimmer of hope for an explanation of this foundational feature, based in adaptive selection. This is one of the key forms of top-down action from the context to the local system, because selection takes place on the basis of some specific predetermined selection criterion, which is therefore (because it determined the outcome) at a higher causal level than that of the system behaviour being selected for.
At least that's an idea to consider. It needs developing to make it firm - if it works.
George