Alright, well I think I have an answer after much experimenting and a trip to WalMart to exchange for a new blender...
The Hamilton Beach, I filled a pitcher of water and immersed it to it's deepest allowed point. Knocked all the air out (keeping it immersed this whole time), pulsed it a few times then when I tilted it sideways (still immersed), BIG bubbles came out, way more than what could have been trapped from just not knocking them all free the first time. So I kept it immersed, pulsed a few more times and *more* BIG bubbles. Not cool. I even looked up youTube videos to make sure I wasn't missing some obvious key piece of information on how to operate a stick blender (lol). Definitely not user error here (yay!). The only explanation I can come up with is that the force generated by the whirling blade was pushing the soap out faster than more could flow in which created a vacuum and pulled air in through the shaft, like blowing on a straw. I probably pulled out every pot, pan and bowl in the kitchen and filled it with blended water to see if maybe it wasn't also a combination of the container I was using for soap.
Luckily WalMart will take anything back in any condition. I exchanged it for a GE blender and no problems at all! I really like the idea to drill holes in the top of the bell so that's on my Honey-Do List now. Ohmigosh I also didn't realize when I made a previous post that it sounded like I was throwing out bubble-filled batches, haha no way! Soap is soap! My lavender orange batch with beautiful hanger swirls (5th try is the charm in my case) may have a really ugly case of what looks like soap acne but it'll still work and smell great. I just meant that I didn't want to continue making ugly batches.
Thanks everyone!