Near the center of each drop where corrosion occurs, the blue color indicates that Fe2+ ions have formed--the first step in the oxidation of iron that eventually leads to the formation of rust:
Fe ® Fe2+ + 2 e-
The ferroxyl indicator turns deep blue in the presence of Fe2+. But this color appears near the center, beneath the drop--farthest away from the oxygen-rich outer layer of the drop. The outer edges of the drop--where the concentration of oxygen is highest--begin to turn pink. The phenolphthalein in the ferroxyl indicator shows that the outer portion of the drop is becoming basic.

But in the drops which show evidence of corrosion, where does the base come from? When dissolved oxygen is reduced in water one of the possible half-reactions is:

O2 + 2 H2O + 4 e- ® 4 OH-