Tim, I suppose only the owner can tell us the case. I'd like to see some pictures of a larger area of the frame.
I don't generally like to see blue stain to that degree on an exposed face of a timber, and suspect few would.
Part of my reason for suspecting a rot issue is that it is unusual for ants or similar bugs to invade dry wood, they tend to go for weak spots, and in my experience they favor fungus-compromised wood.
Another possibility though is that there was some kind of beetle egg present in the sapwood before the frame was ever raised, and a lone larva ate its way to maturity. This of course would require the affected area to be sapwood.
Looking at the picture, I think you might be right about the white being paint, and the balling could just be a result of the paint mixing with the insect dust.
