Tom,
I don't see why you are assuming the " positive feedback loop (think of microphone-amplifier feedback)."
I said the data was discreet because it seems to be received as light quanta, in either sufficient quantity to activate a sensor or not. There isn't any problem Tom. I am aware that different observers can receive data from the same event and fabricate it into their own reality. That is because the potential sensory data is not just a single particle or ray but many photons spreading out from the source over time. I mentioned the quaternion light cone model described by Roger Penrose (in his PI lecture Twistor space and quantum non locality) in my essay as a potentially useful description of what is occurring as well as the potential usefulness of related algebras.
Yes Tom what is left to be called physically real, that is -your- use of the phrase physically real, is information. (How marvellous that that is the topic of the next FQXi large grant round.) I do not call it information because it is a problematic word that is used in different ways by different people and causes confusion and argument. I have been calling it potential sensory data because that is what it is to us and our technology. It can be received and made into something; it is not just what it is and that's all.
I too have talked about the correlation in my essay. I think I understand what you mean by that "quantum correlations are self-limited by a local classical time parameter". You are talking about how the potential 'data' spreads out and so what is found where, when. When one tries to project what is happening in the quaternion model onto a 3D manifold it then looks rather strange, as Roger Penrose explains. It is also going to be strange for Octonian algebra too. The problem is from incorrectly assuming that the space-time in which objects are seen to exist,( that can be adequately described with a space-time manifold), is that space in which the data exists and propagates. The relationship between Object reality and Image reality has some similarity to the description of implicate and explicate orders described in this paper ALGEBRAS, QUANTUM THEORY AND PRE-SPACE by F. A. M. FRESCURA and B. J. HILEY, Department of Physics, Birkbeck College, London WC1E 7HX UK (Received In February, 22, 1984)
Quote " In this view, the space-time manifold is not a priori given. Rather it is to be abstracted from a deeper prespace.... Quote "In this pre-space, the notion of locality is not primary but is a relationship in prespace which, in an appropriate explicate order, becomes a local order in the explicate space-time."
The framework I have set out shows the primary relationships. The Object reality is analogous to an implicate order and the Image reality the explicate order. different words same generally implied meaning. Now do you want to tell me that Sir Terry Pratchett's "Disc world" physics and the physics of our universe must be united into a single model of reality because the fabricated reality was made within our reality?