So will the two levels currently on lindex come together?

So will the two levels of limits and markets come together over the next week or so?

Have not seen a market look like that before.

Will people try to make an opportunity out of the difference somehow?

Nope... Buyers want to pay as little as possible for L$ and sellers
want to get as much as possible for every L$.

In the current enviorment, there are more sellers than buyers and
its causing sellers to jump over each other to sell. Pushing the L$
lower. The reason this is happening is because there is a flood of
Linden Dollars floating around in the economy. Thanks to Linden Labs
and their endless stipend printing machine.

It's because of the margin LL charges on trades. It's 3.5%. So you should see the sellers at a certain point and the buyer 3.5% lower. (Give or take a couple L$, this is where arbitrary profit comes into play and where the fun starts )

Is this also going to be more confusing to newbies - therefore making them more hesitant to buy?

Of the casual user, LL may want to consider changing the basic UI to display only the BEST BUY and SELL rate and name them MARKET BUY and SELL rate.