Based on my experiences with these strips, I don't think it is an issue with the LED. It is an issue with the signals getting too close on either the copper traces or inside of the chip itself. The effect is something to do with the clock coming out of the arduino to the first chip. Since each chip basically takes the signals (data and clock) and passes them down the chain to the next chip, it is somehow limiting the signal or cleaning it up enough that the issue does not persist going down the chain.
I do not have a logic level tester, so I cannot say what the difference is between the signal coming into the first chip and the signal coming out of it. If someone has one (and the free to play with it), I would be interested to see what the difference is. Might help us figure out a more permanent solution.