Bit out of my usual territory this one (I'm a Cardiff lad, nowhere near Lake Tahoe!) but I'm curious whether anyone managed to capture footage. I do a fair bit of investigation work at historical sites and one thing I've learned is that witness accounts alone rarely hold up when people start picking them apart on forums like this.
So what are we actually dealing with here - stationary light, moving light, colour changes? Did it make any sound? Those details matter a lot when you're trying to rule out the obvious stuff like drones or military aircraft before you go further with it.
Also what time exactly on Thursday? There were apparently some unusual atmospheric conditions over parts of the US last week according to a mate who follows that sort of thing, and that can cause some genuinely baffling optical effects at altitude. Not saying that's the explanation, just worth knowing before people jump to conclusions.