Is there any way of applying a ColorMatrixFilter to one rectangular area of a DisplayObject, leaving the rest untouched? The DO is a container, and the user interacts with objects in it, so taking snapshots to change its appearance isn't an option.
No can do... see this: http://stackoverflow.com/questions/1189226/apply-filter-to-everything-in-as3/1193319
UPDATE: As the referenced post explains, you could either put everything you need to apply the filter to in a different container than the rest, or (and I think this is more usefull in your case) put a Bitmap on top of all you interface, and draw/applyFilter it when something changes.
The Bitmap won't interrupt mouse events (it's not an InteractiveObject), and you would be able to control how, when and what sub-area of you filtered area to update... specially with ColorMatrixFilter, as it doesn't affect sorrounding pixels. Its a bit of work to setup, but it pays off ;)
Good luck!
One potential method of pulling the off would be to have two copies of the object, one above the other. The top object would have the filter applied to it and also have it's scrollRect property set so as to mask it out to the rectaglw you wish. The rear object would then show the rest of the object in it's unaltered form.