...pulsing bright rainbow of colors...
Sounds like very bad astronomical seeing effects. Even a steady atmosphere acts like a weak prism and in fact all dielectrics tend to bend blue light more than red.
Astronomical seeing is basically disordered refraction due to turbulence and it has a chromatic component as well. A bright point-like object seen through thick turbulent air will definitely appear to "twinkle" not only in intensity but in color, since the intensity noise will be different for blue than green or red.
Your Dobsonian has quite a large light collection area so even a random star, not otherwise considered bright, will become extremely bright when viewed through it.
So there's probably nothing amiss with your telescope based on this observation. If you'd like to see the effect reduced, you can move to extended objects (as opposed to unresolved, point-like stars) such as planets and nebulae and even the disk of the moon at very high magnification when it won't be so overwhelmingly bright. Try the terminator; the line between the bright and dark areas of the moon where shadows are long and the 3D nature of the surface is more dramatic.
You can also try:
- waiting until much later at night when the Earth's surface and atmosphere has cooled a bit and there's less turbulence
- looking closer to the zenith where you light path traverses less atmosphere than it would looking closer to the horizon
- looking in directions away from any hotter areas like urban centers
- if possible, moving your scope to a substantially higher elevation (helps only if the source of the turbulence is local)
12:23 watch for about 30 seconds to see the color scintillations.