James:

I'm guessing you gave your stitching program fits by forgetting to AEL on the appropriate location? I see the banding in your original too. Thought it might have been whisps of wannabe clouds forming since you weren't using a particular model of the same camera brand I shoot with (says Jim taking a good natured poke at his own brand <G>.

Anyway, I'm a neophyte when it comes to post processing, but here's what I came up with in PSE8 using a combination of the large and small flaw SPOT Healing Brush.