While cutting up a fallen tree at my friend’s house in the forest (highway 14/Sand Canyon Rd area) I decided to take a break and lie down on the gate of my truck and view some clouds passing through the canyon.

While observing a low cloud that was "splitting" and evaporating, I saw an unexplained object in the sky.  Looking up from approx a 45 deg angle from my truck, I saw a round object at a very, very high altitude.  It was by chance I saw this; it was directly right of the cloud formation I was looking at and was quite high; I doubt I would have seen while even looking up at birds. 
At first I tried to reason that it was a high flying aircraft or a maybe a passing satellite.  But after a very brief arch like movement in the sky, I viewed this object in one spot for at least 20-25 minutes.  
After a few minutes I grabbed my Carson binoculars out of my truck to get a better view which made a bit of a difference.  It was just motionless in the air (jumping around in my binoculars since you cant keep your hands perfectly still) and then I saw a blue, what appeared to be arrow-tipped shaped object rotate around the original round object that I was viewing. 
After about 10 minutes the "arrow" seemed to be gone and the object seemed to emit a red and white (alternating) light. This could have been the sun/light anomaly but I was observing the lights in timed intervals. 
I was looking at this for another 10 minutes. 
For a third time I took the binoculars away to see where the object was in relation to the tree in front of me, but this time when I looked up I couldn’t locate it again. 
I started to view this at appox. 3:40 pm PST on 08APR06.