

You can also clearly see the lines getting sharper near the sphere, as well as bending, because part of the blurred image is blocked by the sphere.
To recap: This effect is caused by the background being (slightly) out of focus, and by the foreground object effectively occluding part of the camera / eyeeye aperture, causing the effective aperture (and thus the resulting image) to be shifted. It is not caused by:
Diffraction: As shown by the computer renderings above (which are created using ray tracing, and therefore do not model any diffraction effects), this effect is fully explained by classical ray optics. In any case, diffraction cannot explain the background images shifting towards the obstacle when the focus is behind the background plane.
Reflection: Again, no reflection of the background from the obstacle surface is required to explain this effect. In fact, in the computer renderings above, the yellow sphere / cylindercylinder does not reflect the background grid at all. (The surfaces have no specular reflection component, and no indirect diffuse illumination effects are included in the lighting model.)
Optical illusion: The fact that this is not a perceptual illusion should be obvious from the fact that the effect can be photographed, and the distortion measured from the photos, but the fact that it can also be reproduced by computer rendering further confirms this.
Addendum: Just to check, I went and replicated the renderings above using my old dSLRDSLR camera (and an LCD monitor, a yellow plastic spice jar cap, and some thread to hang it from):
In fact, with my mild (about −1 dpt) myopia, I can personally confirm that, without my glasses, I can easily see both the bending effect and the sharpening of background features when I move my finger in front of my eye. I can even see a hint of astigmatism (which I know I have; my glasses have some cylindrical correction to fix it) in the fact that, in some orientations, I can see the background features bending not just away from my finger, but also slightly sideways. With my glasses on, these effects almost but not quite disappear, suggesting that my current prescription may bemaybe just a little bit off.