Actually, you might want to consider that light passing through heated air also bends. You get this effect with heat shimmer from hot surfaces. However, it's unlikely to be the cause here.
However, let's entertain that notion for a moment, and say the craft is using a mechanism that produces something other than gravitational lensing.
So, in this fantasy (and it is a fantasy, but worth considering) the craft has a highly-unusual field surrounding it with a bizarre refractive index. Due to the nature of the field, light from the exterior entering will be refracted around the object, and light from the object itself will refract and exit in the opposite direction from where it strikes the field on the inside. As a side effect of the internal reflection refracting to the opposite side, the object will have a distorted image of itself which is 50% closer to the viewer than its actual position. Should the refraction from the interior be directionally based, due to quite strange warping effects, then it is also possible all the photons/types of radiative energy will gather towards a set area, resulting in a smeared 360 degree image of the craft being seen.
Thinking back... I remember there were gravitation effects when Fore's Advisor had a problem with her equipment one day, can't find the exact bit of text this second...