It could be any number of things. The most likely situation would be that the ip is part of a block assigned to an isp based in one region, but assigned all throughout a larger part of the country to the isp's subscribers.

The end of this situation would be quite similar to the campus problem. If you suffered a real break in you would need to pull the power plug on your box and contact the authorities so they may do a forensic examination and collect the appropriate information. If it's not enough for all that the most you can hope for is figuring out what isp owns the ip that the traffic is coming from and contacting one of their network admins via the information found in a whois of that domain (www.arin.net) and having them further investigate the users activities and taking the appropriate action.