Out of curiosity, why has everyone assumed the target can see, through normal sight, out of the radius?
IF light is being bent around the caster, then the caster is in darkness. He needs a pre-cast Presence or something to "see".
If its a Mentalism version we use the "somebody elses problem" approach. Visible, but un-important.
Fornitus, you make and excellent scientific point!
IMO, The shimmer/distortion results from not being totally invisible. So, you're kind of looking through a funhouse mirror. It's distorted so much that the image isn't a recognizable pattern, at first. Perhaps the same magic that distorts/bends the image one way, focuses it on the other side. This way, the one invisible can still see normally... If that's how you play it. Shadowy, black and white, etc, would be fun too!
Once a "danger" is perceived, the distortion can be "cleaned up" because our brains spend more processing power on image/sound/sensory recognition. We focus more on the threat.
Just a thought.