An intense downward field-aligned thermal ion flow and intense narrow band waves with frequencies just below the local ion gyrofrequency have been observed at the equatorward edge of an auroral arc. The magnitude and direction of the field-aligned current required by the measured dc electric field pattern are consistent with the ion flow measurements and with a differential drift between ions and electrons of 10--20 km/s. Such a drift is sufficient to destabilize the electrostatic ion cyclotron wave which has a narrow frequency spectrum near and above the gyrofrequency in the plasma reference frame. The narrow bandwidth of the observed electric field oscillations is in agreement with this mode, as is the frequency range which is shown to be consistent with a Doppler shift due to the relative velocity between the plasma and rocket. A second explanation for the observed ion flow involving saturation of the ion cyclotron instability by extreme heating of the plasma ions in a region above the rocket has been examined and also found to be consistent with the measurements. In this model the observed ion flow was due to a thermal expansion of the hot spot. Such heating would energize O+ ions sufficiently that they could escape the gravitational field and could hence act as a source for energetic oxygen observed in the inner magnetosphere.