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Optical and near-infrared spectroscopy of the newly discovered peculiar L dwarf 2MASS J11263991-5003550 are presented. Folkes et al. classified this source as a high proper motion L9±1 dwarf based on its strong H₂ O absorption at 1.4 µm. We find that the optical spectrum of 2MASS J1126-5003 is in fact consistent with that of a normal L4.5 dwarf with notably enhanced FeH absorption at 9896 Å. However, its near-infrared spectrum is unusually blue, with strong H₂ O and weak CO bands similar in character to several recently identified ``blue L dwarfs.'' Using 2MASS J1126-5003 as a case study, and guided by trends in the condensate cloud models of Burrows et al. and Marley et al., we find that the observed spectral peculiarities of these sources can be adequately explained by the presence of thin and/or large-grained condensate clouds as compared to normal field L dwarfs. Atypical surface gravities or metallicities alone cannot reproduce the observed peculiarities, although they may be partly responsible for the unusual condensate properties. We also rule out unresolved multiplicity as a cause for the spectral peculiarities of 2MASS J1126-5003. Our analysis is supported by examination of Spitzer mid-infrared spectral data from Cushing et al. which show that bluer L dwarfs tend to have weaker 10 µm absorption, a feature tentatively associated with silicate oxide grains. With their unique spectral properties, blue L dwarfs like 2MASS J1126-5003 should prove useful in studying the formation and properties of condensates and condensate clouds in low-temperature atmospheres.