>http://www.lpi.usra.edu/science/kirkland/

That does look like a plausible alternative.

If the hematite is a firmly cemeted coating on the particles, though, why would compressing the surface make it go away?

In terms of the white/blue debate though, to be fair to the group at LPI that you cite, they are also the one (or one of the ones) that argue that we may be overlooking carbonate deposits due to the problems in taking real-world remote IR spectra. For example, they think we're being too quick to rule out lake sediments as the source of "White Rock" and others of that ilk.

Any thoughts from the vis-near IR spectra they released earlier today?