Final answer:
The most likely cause of the baby's distress during resuscitation, characterized by a worsening heart rate, oxygen saturation, and a bright glow on transillumination, is a left-sided pneumothorax.
Step-by-step explanation:
During resuscitation, if a baby initially responds to Positive Pressure Ventilation (PPV) with a rapidly increasing heart rate but subsequently exhibits a worsening heart rate and oxygen saturation, decreased breath sounds on one side, and a bright glow upon transillumination, the most likely cause of these symptoms is a left-sided pneumothorax. This condition occurs when air leaks into the space between the lung and chest wall, causing the lung to collapse, which impairs breathing and oxygenation.