It's a coating they put on the lenses.
I'm really struggling with this one. There are some more things I want to try, but it'll have to wait til tomorrow, sorry.
Yes, it's incredibly destructive. Never use it.
Only use the Crop Tool, and NEVER during editing.
http://www.damiensymonds.net/2011/09/cropping-tutorial.html
Download the PSD
It's the same gradient layer twice. The bottom one is on "Multiply" mode, and I kept it hidden until I'd almost completely masked the top one. Then I painted on its mask at low opacity to darken the background around the hair just enough to match the new background.
And the top layer is the noise layer.