This is a little project I threw together for a friend to imitate the TV OFF effect seen in this clip (project file is below):

I did not duplicate the entire project and used only Vegas default effects and I am definitely not saying that what I've done here is the "correct" way to do this and there are plenty of other methods, but here's what I did (please stop in the forums and share your thoughts, advice, alternate techiques, whatev):

1. Add your video clip to the timeline.
2. Add a TV Simulator effect to your video clip. Futz and figget with it however you like.
3. Add a Deform effect to the video clip:
     3a. Add a keyframe 13 frames from the end of the clip (half second). Or earlier, if you like.
     3b. Add another keyframe to the end of the clip.
     3c. Change the Deform values to squash the clip, Left/Right (-0.800) and Top/Bottom (-1.000). (Or whatever you like.)
     3d. (optional) I also liked fooling around with the Curve values Left/Bottom (0.500) and Right/Top (-0.500). (Or whatever.)
4. Add a Sony Solid Color black clip to the end (Media Generator). This is so the Lens Flare will have something to appear over...
5. Add a Lens Flare at the Track level.
6. Animate it to sync with the Deform (more or less) with the most Intensity and Size at the point where the video clip disappears, then gradually fading off after that.

References:
* Download the entire ginormous project file (*.veg in a *.zip): TV-OFF.zip (4 kb)