Chosen Solution
My iPhone 6 Plus camera is taking blurry picture/videos post the iOS 8.1 upgrade. Seems to be an underlying hardware fault exacerbated by the latest OS update. If you put your ear to the lens you can hear it vibrate wildly. Could be an issue with the OIS. I bought my phone in Canada while traveling and cannot send it in to Apple where I am (India). Thus am trying to figure out if this is a hardware issue (with the camera) that I can fix by swapping out the part myself. Here is a preview of what the issue looks like - http://youtu.be/5iC_UeFSYW0
This is a belated answer so hopefully it can be of use to folks who search for and find this question. That definitely looks like a defective camera. You could replace it yourself by following this guide.
