THE GALACTIC ENVIRONMENT OF THE Ne VIII ABSORBER TOWARD HE0226-4110

We report the discovery of a small galaxy system in the vicinity of the Ne VIII absorber at z = 0.20701 toward HE0226 - 4110. The galaxy system consists of two 0.25 L(*) disk galaxies and a 0.05 L(*) galaxy all within Delta v < 300 km s(-1) and rho <= 200 h(-1) physical kpc of the absorber. We consider various scenarios for the origin of the Ne VIII absorption, including photo-ionized gas from an active galactic nucleus, a starburst-driven wind, a hot intragroup medium, hot gas in a galaxy halo, and a conductive front produced by cool clouds moving at high speed through a hot medium. We argue that the conductive front scenario is most likely responsible for producing the Ne VIII feature, because it is consistent with the observed galactic environment around the absorber and because it naturally explains the multi-phase nature of the gas and the kinematic signatures of the absorption profiles. Although our preferred scenario suggests that Ne VIII may not be directly probing the warm-hot intergalactic medium, it does imply the existence of an extended hot confining medium around a disk galaxy that may contain a significant reservoir of baryons in the form of hot gas.