It's not loaded in as an image and if you click on any other object and clear the seems the blue grid stays in place. Even if I delete the blue grid from the UV editor it stays in place!
Oh man, I had no idea this would cause so much confusion. Sorry you had to suffer through that. I think the key is the error that Spikey pointed out, and I'll try to stress that unwrapping completely enclosed shapes without seams or projection will cause bad results in future videos.
