Processing in camera raw creates diagonal bands on image - how can I fix this?

I have Photoshop Elements 11 on a Mac running 10.6.8. I have been taking raw images on a Canon T3i and processing them in camera raw at 16-bit and then fine-tuning in the editor with no problems until this week. Now when I process an image and open it in the editor, the image has diagonal bands across the whole thing. The image is still visible through the lines - they appear as distortions or noise. If I zoom in or out the bands are not visible, so I initially thought it was an odd viewing-only problem. However when I save my edited image in various jpg sizes/resolutions the bands are still visible.
I tried working with photos taken on different days and that didn't make a difference. I tried restarting - no difference. I tried resetting any preferences I may have changed - no difference. I tried adding noise to the photo because I found mentions of banding in areas of low contrast that needed noise to reduce banding - no difference. I tried not changing a single setting in CR and processing - no difference. I updated the CR plugin to 7.4.0.137 - no difference. When I run the software updater in elements it says my software is up to date. I am out of ideas except for reinstalling the entire program.
I have attached screen grabs to show the problem I am having. On the top is what an image looks like in CR. On the bottom is the same image after it is opened in the editor. When I enlarge the image the lines are no longer visible, but when I save the image as a jpg the lines are visible in the jpg.
Any ideas as to what the problem is? 

http://support.apple.com/kb/HT2090 How to Troubleshoot iSight

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