any chance this could turn into a real war?
Chavez is not a stupid man
Problem is, the way Chavez's popularity has been going down hill, he may decide that he needs a war to unite people behind him. It would be risky, but if he thinks he'd be going down anyway, he may well decide to go down fighting rather than peacefully.
That's just silly. He's still plenty popular to maintain power, and war is not something banana republics can sustain.
Besides, Columbia has a large and powerful military built up by the Empire - it is after all the main satellite in South America. It normally is used to go around torturing peasants who supposedly support FARC, but it could easily best a Venezuelan/Ecuadorean invasion. Keep in mind that both of those countries, being left-leaning, have very small militaries, due to not receiving any support from the US.
No, this dispute is simply about the Columbian regime entering the territory of another sovereign country for the purpose of killing its political opponents. People get upset about violations of sovereign territory, and besides, Chavez probably considered the guy who was killed a personal friend.